Comparing young SMEs' growth determinants across regions

Abstract

If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The aim of this study is to advance the understanding of firm growth determinants by comparing the factors influencing young firms' growth in 13 countries corresponding to three contrasting regions. Design/methodology/approach -The authors propose an integrated model of venture growth where entrepreneurs' profile, firm resources and market characteristics are combined. This model is tested using three OLS regressions, one corresponding to each region. Findings -The results show that compared with the remainder two regions, the less favorable business conditions verified in Latin American countries emphasize the relevance of entrepreneurs' human capital endowments in determining business development and its further growth. On the contrary, market-related issues and the availability of financial resources are more important in South-East Asia and Mediterranean Europe. Team size and particularly its growth are positively associated with firm growth in all the studied regions. Practical implications -The results of this study confirm that a firm's growth determinants as well as their importance vary across regions. Consequently, policy interventions should take into account the specificity of each region when designing entrepreneurial policies, avoiding the adoption of "one size fits all" solutions. Originality/value -The main contribution of this paper is twofold: first, it collects empirical evidence about young firm growth in less studied regions; second, by comparing the results for each region differential effects of several determinants of firm growth in quite contrasting contexts are discussed.

Business Performance in Young Latin American Firms

“…previous studies in Latin america generally found a positive relationship between firm performance and entrepreneurial capabilities (Kantis et al 2005;Federico et al 2012). however, as discussed below, our estimations cannot confirm these results.…”

“…prior research has tried to understand the factors that affect the emergence of new dynamic firms by analyzing the entrepreneurial process and the characteristics of entrepreneurs (Kantis et al 2002(Kantis et al , 2005. Other studies used econometric methods to assess the influence of these characteristics on business growth (Federico et al 2012;Capelleras and Kantis 2009). these studies mainly referred to the early phases of the business life cycle to demonstrate empirically the key role of entrepreneurial human capital (founders and their networks) in post-entry performance.…”

The usage of digital marketing channels in SMEs

“…Our data does not confirm a lack of financial resources to be a barrier to adoption (cf. Cooper et al, 1994;Federico et al, 2012;Gilbert et al, 2006). The pivotal factor in the usage of digital tools seems to be whether the marketing manager is knowledgeable about the digital options and actively pursues his/her personal interest in the tools.…”

“…The lack of human resources, time and expertise are the largest barriers to digital marketing usage in the industrial context among both SMEs and larger corporations (Järvinen et al, 2012; see also Michaelidou et al, 2011). In the same vein, the skills of the employees to utilize the channels have been identified as a significant enabler of (or barrier to) adoption of digital channels in SMEs (Chen and McQueen, 2008;Gabrielli and Balboni, 2010;Sayre et al, 2012) A lack of financial resources/capital is typically considered a barrier to the growth of SMEs (Cooper et al, 1994;Federico et al, 2012;Gilbert et al, 2006) and thus also to act as a barrier to the adoption and use of digital channels. Although digital marketing, at its best, has n o v a ri ab l e c os ts , th e f i x e d c os ts m ay s ti l l b e p r oh i b i ti v e f or m an y c om p an i es .…”

SME Growth and Performance: Examining performance dimensions, drivers and Barriers

“…Growing global rivalry means SMEs are facing a daunting challenge of increasing and maintaining their businesses. Consequently, a coherent and widely accepted theory of firm growth is missing as various theoretical viewpoints are combined to provide an explanation for the growth of firms (Federico et al, 2012). Entrepreneurial motivation has been found to affect SME growth and performance.…”