Are hyper-growth firms inherently different? Preliminary evidence from a sample of fast-growing European SMEs

Minola, Tommaso; Cogliati, Giordano Maria; Cassia, Lucio; Paleari, Stefano

doi:10.1504/ijev.2017.086482

Cited by 7 publications

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“…Notwithstanding the fact that in recent years, some studies (e.g. Bianchini et al , 2017; Bamiatzi and Kirchmaier, 2014; Minola et al , 2017) have emerged that focused on the characteristics of high business growth, the general knowledge about the characteristics of HGFs remains blurred. In a more recent article, Coad and Srhoi (2020) stated that despite the multiplication of research on firm growth, progress still remains slow, and there is a disappointment with the general ability to predict which firms will realize high growth rates.…”

Section: Discussionmentioning

confidence: 99%

Does the sector matter? An analysis of high-growth firms and industry growth rates

Dillen

Vandekerkhof

2021

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PurposeThis paper aims to analyze the effect of industry growth rates on the characteristics of high-growth firms (HGFs) that are active in a particular industry. By making a distinction between HGFs active in stable and declining industries and HGFs active in growing and high-growing industries, it is analyzed if the main dimensions of firm performance are significantly different for HGFs active in one of these different industry types. Gaining more insight into this industry aspect of high firm growth is important as governmental measures towards HGFs may be more effective if they have a specific sectoral focus.Design/methodology/approachA subset of 740 Belgian HGFs was analyzed. Data were gathered from the Belfirst database. HGFs were classified within their corresponding industry type: a declining industry (negative growth), a stable industry (0 −5% growth), a growing industry (5 −10% growth) and a high-growth industry (>10% growth). Four dimensions of structural firm performance that are expected to correlate with high growth were taken into consideration: productivity (value added per FTE), profitability (ROA), innovativeness (intangible assets) and financial health (solvency and liquidity).Tukey's range tests in conjunction with post-hoc analysis of variance (ANOVA) tests were carried out to test for significant differences in all the mentioned variables for the HGFs in the four different industry types.FindingsResults show that HGFs active in a stable industry are not significantly more profitable or innovative than HGFs active in a growth industry. However, significant differences could be encountered when it comes to the other two dimensions of structural firm performance: productivity and financial health. It is shown that HGFs active in declining and stable industries are significantly more productive than HGFs active in growth industries and high-growth industries. Also, HGFs active in declining and stable industries have significantly higher liquidity ratios than firms active in growth industries, pointing towards a better financial health for HGFs in nongrowing industries.Research limitations/implicationsThe results confirm the conceptual logic that the differences between resource-based view (RBV) and industrial organization (IO) propositions will have an impact on the drivers of firm performance and high business growth. Every future study that focuses on the growth determinants of HGFs should be aware that considering the subset of HGFs as one homogenous group may be suboptimal. It is likely that the growth determinants of both HGF types will indeed be fundamentally different.Originality/valueUntil now, all studies on HGFs have considered the subset of HGFs as a whole. This paper tried to disentangle the subset based on the growth rate of the industry in which HGFs are mainly active. In this proposition, a reason for the lack of knowledge about characteristics of HGFs may – at least partially – be found in the fact that industry membership plays an important role in determining the characteristics of a high-growth firm. Future studies focusing on high-growth determinants may benefit from systematically taking the industry growth rates into account, with the knowledge that the propositions of two different theories – IO and RBV – may be the fundamental drivers of a firm's high-growth rates.

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Section: Discussionmentioning

confidence: 99%

Does the sector matter? An analysis of high-growth firms and industry growth rates

Dillen

Vandekerkhof

2021

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“…For example, Anyadike-Danes et al (2015) identify a group of persistent outperformers or ‘extraordinary prolific job creators’ (EPJCs) that provide an oversized contribution to growth. Studies on hyper growth firms (Minola et al, 2017), fast growth firms (Du and Bonner, 2017) and scale-ups (Piaskowska et al, 2021) are also yielding new important insights. Scholars have also begun to point to the ordering of events, with profits playing a foundational platform for future growth episodes (Ben-Hafaïedh and Hamelin, 2022; Coad et al, 2017).…”

Section: Introductionmentioning

confidence: 99%

In search of the next growth episode: How firms catalyse and sustain periods of high growth

Raby

Hart

Harney

2022

International Small Business Journal: Researching Entrepreneurs

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This is an introductory article to the special issue In Search of the Next Growth Episode: How Firms Catalyse and Sustain Periods of High Growth. The article reviews alternative streams of research on firm growth, including ‘random growth’, ‘responsive growth’ and ‘resourceful growth’. The themes of, and contributions to, the Special Issue are presented. Finally, we identify a number of directions for future research, including the importance of unpacking the drivers and causes of high growth episodes (HGEs), amplifying the role of the leader in research on firm growth, while questioning the desired outcomes and consequences of growth. We assert that there is still much to learn about firm growth. Our hope is that this special issue inspires new approaches and an enlarged understanding in this domain.

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“…Current understanding of SME high growth however, remains somewhat limited (Minola et al, 2017; Moreno and Casillas, 2007). The literature tends to associate such growth with three main factors (Blackburn et al, 2013): the entrepreneur and his/her individual characteristics, such as age, gender, educational qualifications and management style (Raby et al, 2018); firm strategy and resources, for instance, engaging in alliances or acquisitions, the availability of financial slack and intellectual capital (Cassia and Minola, 2012; Demir et al, 2017; Koryak et al, 2015); and the strategy-environment fit (Ensley et al, 2003; Wright and Stigliani, 2013).…”

Section: Introductionmentioning

confidence: 99%

Under which circumstances do family SMES achieve high growth? A behavioural perspective

Minola

Baù

Brumana

et al. 2022

International Small Business Journal: Researching Entrepreneurs

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High-growth firms contribute disproportionately to the creation of employment, wealth and economic development on a global basis. Yet, knowledge of the circumstances under which such growth patterns occur is limited, and the findings with regard to small and medium sized enterprises (SMEs) are inconclusive. Adopting the behavioural agency model, we analyse the effect of family control and related nuances (i.e. degree of family ownership and presence of a family chief executive officer (CEO)) on SME growth. Furthermore, we argue that the type of slack resources and their availability are a crucial organisational contingency when investigating high growth in SMEs. Using a sample of 39,631 European SMEs over a 13-year period, we find that family firms are less likely to achieve high growth compared to non-family firms; having a family CEO further reduces this likelihood. Instead, at higher (vs lower) levels of family ownership, the probability of family firms achieving high growth increases. Furthermore, the availability of high-and low-discretion slack resources influences these relationships. Our study advances current understanding of high growth in general, and family firms in particular.

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Are hyper-growth firms inherently different? Preliminary evidence from a sample of fast-growing European SMEs

Cited by 7 publications

References 0 publications

Does the sector matter? An analysis of high-growth firms and industry growth rates

Does the sector matter? An analysis of high-growth firms and industry growth rates

In search of the next growth episode: How firms catalyse and sustain periods of high growth

Under which circumstances do family SMES achieve high growth? A behavioural perspective

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