The size–growth relationship in the social services sector in Austria

Abstract

The social services sector is among the fastest-growing industries, but it has gained little attention in the debate regarding firm growth. This article analyzes firm growth in relation to firm size using payroll expenses as our indicator for both firm growth and firm size. We apply structural equation modeling and full maximum likelihood estimation using Austrian data comprising all non-profit social service providers. After 2013, fewer firms have been entering and more have been exiting the sector; however, we find that growing in size is still not associated with higher growth rates. Our study emphasizes the role of small organizations in remaining a growth sector.

Assessment of financial health of service sector companies in the Central European region

“…Past research has shown that the third sector is under increasing pressure to evaluate its impact and performance from governments and other contracting authorities. The social services sector is one of the fastest growing industries, but has received little attention in the debate on corporate growth (Rajiani et al, 2018;Reitzinger and Pennerstorfer, 2021). Based on his analysis of economic indicators, particularly gross added value and employment rate, Szczukocka (2020) states that the determinant of the level of service development is not only its high share in three-sector structures, but also the internal changes observed in the sector itself.…”