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The Early Stages of Growth in Micro-Firms

Kai Hänninen, Harri Jokela, Martti Saarela and Matti Muhos
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Kai Hänninen: University of Oulu, Kerttu Saalasti Institute, Finland
Harri Jokela: University of Oulu, Kerttu Saalasti Institute, Finland
Martti Saarela: University of Oulu, Kerttu Saalasti Institute, Finland
Matti Muhos: University of Oulu, Kerttu Saalasti Institute, Finland

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Abstract: Micro-firms are a dominant group in every economy. However, in the current literature, little attention has been paid to this SME subgroup. Thus, new context-specific knowledge on the early stages of micro-firm growth is needed to strengthen business environments and to develop business support services. The aim of this study was to investigate the growth of independently owned technology- or service-based micro-firms in northern sparsely populated areas (NSPAs) in Finland. This domain has not been extensively studied. This study can be condensed into the following research questions: (1) How do the ownermanagers of NSPA micro-firms evaluate their firms’ current stages of growth? and (2) How do the stage descriptions in the self-evaluation frameworks correspond with the experiences of the micro-firms’ owner-managers? This retrospective multiple-case study synthesised two empirically-based stage models into two self-evaluation frameworks—one for technology-based firms and one for service-based firms. We tested the two four-stage frameworks to describe current stages of 62 technology- or service-based micro-firms. First, we determined the current stage of growth for each micro-firm. Second, we explored the applicability of the self-evaluation frameworks to the experiences of the micro-firms’ ownermanagers. The results indicated that the self-evaluation frameworks were a relatively good match for the growth experiences of each firm. Both frameworks may help researchers to provide more accurate data on the growth of technology- and service-based micro-firms.

Keywords: stages of growth; micro-firm; micro-entrepreneurship. (search for similar items in EconPapers)
Date: 2017
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