On the consequences of firm growth

Mark Freel and Ian Gordon

MPRA Paper from University Library of Munich, Germany

Abstract: Recent contributions to the literature on small firm growth have been marked by a growing sense of frustration with the state-of-the-art and what it implicates in both theory and policy. In short, while growth events appear relatively common, a tiny proportion of firms sustain growth and ‘scale’; calling into question the very basis of policies seeking to target high growth firms (HGFs). We argue that understanding the frequency of growth events and the rarity of sustained growth requires a better understanding of growth consequences. To this end, we report case study evidence from ambitious entrepreneurs whose firms had experienced an episode of high growth followed by longer periods of mixed performance. Our goal is to shed light on how the experience of growing affects further growth. Our data provide initial insights into the mechanisms linking past growth to growth motivations and into the ways in which past growth lays the foundations for future performance.

Keywords: firm growth; growth intention; ambidexterity; income; barriers (search for similar items in EconPapers)
JEL-codes: L21 L25 L26 (search for similar items in EconPapers)
Date: 2020-02-01
New Economics Papers: this item is included in nep-bec, nep-ent and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:111200

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