Abstract
Building on Resource-Based View (RBV) and Institutional Theory (IT), we decided to study the internal and external factors that affect the choice between different growth strategies in small and medium enterprises (SMEs) in an emerging economy. We started identifying that there is a direct relationship between technological resources and an organic growth strategy, financial resources and an acquisitive growth strategy, and networking capabilities and a hybrid growth strategy. We argue that the intensity of these relations is moderated by institutional factors, such as a country’s intellectual property protections (for organic strategies), credit access (for acquisitive strategies), and trust in the business environment (for hybrid strategies). We based our findings on 450 face-to-face surveys with CEOs from firms in the Electronic Technology, Information, and Communication Sector (ETICS) in Mexico. Managerial implications are also discussed in the paper, as well as future avenues of research.
Highlights
Firm growth, especially for small firms, has been widely studied over recent decades, and even it remains a subject of great interest among academics, managers, and policy makers (Gilbert McDougall, & Audretsch, 2006; Henrekson & Johansson, 2010; McKelvie & Wiklund, 2010; Wiklund, Patzelt, & Shepherd, 2009)
All the results obtained for the coefficients of factor loadings are sufficiently large; χ2227=858 755, incremental fit index (IFI) = 0,918, normal fit index (NFI) = 0,895, and comparative fit index (CFI) = 0,916
The present study contributes to the literature on firm growth from its least-studied dimension, by analyzing the antecedents of strategic growth decisions
Summary
Especially for small firms, has been widely studied over recent decades, and even it remains a subject of great interest among academics, managers, and policy makers (Gilbert McDougall, & Audretsch, 2006; Henrekson & Johansson, 2010; McKelvie & Wiklund, 2010; Wiklund, Patzelt, & Shepherd, 2009). Since the publication of Theory of the Growth of the Firm in 1959 by Edith Penrose, most studies have been focused on predicting and describing differences in growth rates between firms by analyzing different variables and factors that affect growth, yet almost all empirical models of growth have low explanatory and predictive power (Baum, Locke, & Smith, 2001; Davidsson, Achtenhagen, & Naldi, 2006; McKelvie & Wiklund, 2010; Wright & Stigliani, 2012). Other authors have identified the effect that an SME’s different internal characteristics, such as scale of operation, firm age, product and customer structures (Pasanen, 2007), or even size (Brenner & Schimke, 2015; Coad, Segarra, & Teruel, 2016) have on growth strategies
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