A holistic approach to the expansion decision of small–and medium–sized enterprises in a metropolitan area The case of Brussels

Abstract

The present article examines the factors that influence the expansion decision of small– and medium–sized enterprises (SMEs) that have their seat in the Brussels metropolitan area. A holistic approach to this question was adopted, in other words an analysis was made of the impact of cntcrprencur– and enterprise–related factors as well as of elements in the external environment on the decision to expand the business area. Two analytical techniques used, i.e. comparison of subsamples and non–linear principal component analysis, show that there is indeed an influence of entrepreneur– and enterprise–related characteristics as well as of factors in the external environment on the expansion decision. By means of log–linear analysis, a ranking of the influencing variables has been made. It was found that the expansion decision is influenced in hierarchical order by the growth orientation of the SME, contacts with universities and research institutes, the sector, the entrepreneur's training level and the location of the main market. Growth–oriented SMEs, the SMEs that have contacts with universities and research institutes, the sectors ‘services to business’ and ‘wholesale trade’, highly–trained entrepreneurs and the SMEs whose main market is outside Brussels arc more inclined to consider expansion. When expansion is decided, Brussels is clearly given preference.