High-growth SMEs versus non-high-growth SMEs: a discriminant analysis

By A. Moreno, José C. Casillas. 2007

282 citations recorded by the source corpus.

The purpose of this paper is to analyse the main variables that allow one to distinguish between high-growth firms and non-high-growth firms. Theoretically, we discuss such differences through a combination of economic (external approach) and strategic (internal approach) visions. Empirically, this paper provides two differences with regard to previous literature: (1) the primary goal of our work is not to provide an outright explanation of firm growth; rather, we aim to establish what characteristics enable us to distinguish between high-growth and non-high-growth firms. This aspect determines the methodology used (discriminant analysis with dichotomic dependent variable); and (2) firm high growth is understood as an extraordinary growth in comparison with the average growth of other firms in the same industry, and not in absolute terms. The results show that in the main high-growth firms are different from moderate-growth firms or declining firms because of their smaller size (which is contrary to Gibrat's Law), their higher availability of idle resources (consistent with the theory of resources and capabilities), and in some cases, their lower availability of financial resources (consistent with the existing literature on entrepreneurship).

Subfields: Accounting, Economics and Econometrics, Management of Technology and Innovation

View Paper: https://www.semanticscholar.org/paper/e86ee8fa507b3153618dee32d082bc8785fe3b33

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Citations in the corpus

Environmental Innovations, Local Networks and Internationalization (2012, background): “In particular, several empirical works have shown that they can partially substitute for economies of scale in local environments, characterized by SME (e.g. Moreno & Casillas, 2007).”
The relationship between resources, entrepreneurial orientation and performance in farm-based ventures (2011, background): “Recent research has also recognized the importance of organizational resources to enable firms to extract these advantages, adding an important ‘O’ to the VRI framework (Barney 2002 ; Newbert 2007 ).”
Strategies for superior performance under adverse conditions: A focus on small and medium-sized high-growth firms (2014, background): “Established high-growth SMEs have received little attention (Barbero et al., 2012; Delmar et al., 2003; Moreno and Casillas, 2007) yet, these firms differ substantially from both their larger (Coad, 2009) and newly-established micro-counterparts2 (Wright and Marlow, 2012).”
Like milk or wine: Does firm performance improve with age? (2013, background): “Moreno and Casillas (2007) observe that firm age does not help to discriminate between high-growth firms and moderate-growth firms in their sample of 7752 small Andalusian firms.”
Location determinants of high-growth firms (2015, background): “Moreno and Casillas (2007) conduct a discriminant analysis to examine variables that separate high growth from other firms.”
The strategic management of high-growth firms:a review and theoretical conceptualization (2017, unknown): “Nevertheless, we could only find two studies noting the general importance of external funding for HGFs (Todd and Taylor, 1993) and showing that HGFs often exhibit higher financial liquidity and solvency (Moreno and Casillas, 2007).”
Entrepreneurial leadership, capabilities and firm growth (2015, background): “…teams Our knowledge of the factors influencing small- and medium-sized enterprise (SME) growth has increased dramatically over the last two decades (Davidsson et al., 2006; Dobbs and Hamilton, 2007; Gibb and Davies, 1990; Moreno and Casillas, 2007, 2008; Parry, 2010; Rauch et al., 2005).”
Quantifying the relationship between entrepreneurship and competitiveness development stages in Latin America (2011, methodology): “Discriminant analysis is useful because it allows for characterization and classification; in this case, it enabled us to identify and classify a group of countries9 (Moreno and Casillas 2007).”
The Economic Contribution of High-Growth Firms: Do Policy Implications Depend on the Choice of Growth Indicator? (2014, background): “While the above theories do not provide us with many guidelines as to howmuch faster fastgrowing firms will grow, nor what can be expected to be the contribution of HGFs compared to non-HGFs, the empirical literature of firm growth suggests what Dosi (2007) labels an “extremely robust stylized fact””
Managerial capabilities and paths to growth as determinants of high-growth small and medium-sized enterprises (2011, background): “This figure is similar to other criteria previously used as an identification of high-growth firms (Barringer et al., 2005; Moreno and Casillas, 2007; Storey, 2001).”