The Process of the Growth of Small and Medium-Sized Enterprises (SMEs)

Marta Gancarczyk,Jon Mikel Zabala-Iturriagagoitia

doi:10.7341/20151141

Marta Gancarczyk, Jon Mikel Zabala-Iturriagagoitia

Open Access

https://doi.org/10.7341/20151141

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Abstract

Introduction Firm growth is a central topic in the literature on entrepreneurship, strategic management and industrial organization, among others. For an individual entrepreneurial firm, growth is an evidence of the return of the entrepreneur’s investment and self-fulfillment. Growth is also a condition of survival for young and small businesses, as growing firms are found less vulnerable to failure than non-growers (Stam et al., 2006). The macroeconomic importance of firm expansion was recognized in the 1980s, when the phenomenon of gazelles or high-growth firms was first described as those capable of intense size increases within a limited time span (Birch, 1981; Birch & Medoff, 1994; Birch et al., 1994; Storey, 1994; Coad, 2009; Acs et al., 2008). According to empirical research gazelles form a small fraction of business population. However, they represent a disproportionally large share in new job creation (Storey, 1994; Coad 2009; Stam et al., 2006; Acs et al., 2008). Growing firms are also more likely to generate innovations, specifically product innovations involving technological advancements (Coad, 2009; Schreyer, 2000; Storey, 1994; Smallbone et al., 1995). Both researchers and policy makers interested in expansion, focus on rapidly growing firms and on small and medium-sized enterprises. This interest in high-growth enterprises is justified by the observation that the

Highlights

Firm growth is a central topic in the literature on entrepreneurship, strategic management and industrial organization, among others
In order to provide these recommendations, we need to better comprehend the entrepreneurial motivations and the attitudes towards growth, the stimuli and impediments to company growth, the potential mechanisms to firm growth and modes of expansion. This special issue seeks to contribute to the knowledge base on the growth process of entrepreneurial firms, which is an emerging stream of research on firm growth
We present the focus provided in this special issue as complementary to existing approaches, aiming to contribute with new findings in addressing some yet underexplored areas

Summary

Introduction

Firm growth is a central topic in the literature on entrepreneurship, strategic management and industrial organization, among others. This special issue seeks to contribute to the knowledge base on the growth process of entrepreneurial firms, which is an emerging stream of research on firm growth This emerging stream complements the existing perspectives on expansion, which are more focused on: 1) companies’ internal adaptation mechanisms, as reflected in life cycle models, and on 2) determinants and predictors of firm growth (Dobbs & Hamilton, 2006; McKelvie & Wiklund, 2010). The research on the firm growth process and its relationships with other perspectives on firm expansion Studies on firm growth have evolved into a number of approaches, which have in turn addressed various research gaps, questions and problems through the use of differing methodologies (Gilbert et al, 2006; Dobbs & Hamilton, 2006; Davidsson et al, 2006; McKelvie & Wiklund, 2010) In this introductory paper we will focus on three of them.

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