Process and strategies of growth in medium-sized fast-growing firms

Abstract

The study investigates the firm high growth phenomenon and its relationships with reorganization costs and external financial dependence. We use a sample of medium-sized Italian fast-growing firms. Fast-growth firms are structured enough to plan growth strategies and not depend on occasional external events. The paper provides insight into the lumpiness of the process of firm expansion accompanying its reorganization, conditional on the presence or not of a fast-growth event. Moreover, the analysis shed some light on the relationship between growth and performance and on the growth process of a subsample of young, fast-growing firms to check the presence of differences in the process or the strategy of growth. We find a positive and significant relation between present growth and proxy variables for resources organization, a lumpy growth process, and a positive association of growth and profit for almost the whole sample, i.e., a positive balance between costs and benefit of growth.