Together, Penrosean and Barnean resource-based logic make up the dominant theoretical approach to understanding firm growth. While extant literature focuses on a common lineage between Penrosean ...theory and the resource-based view (RBV), we explicate divergence at these origins of resource-based theorizing and subject the growth implications of each to meta-analytic testing. RBV’s central tenets concern resources that meet valuable, rare, inimitable, and nonsubstitutable (VRIN) criteria, while Penrose’s theory discusses the versatility of resources. Theoretically, VRIN resources allow firms to exploit unique opportunities, while versatile resources allow firms to recombine resources in novel ways to create growth. Using meta-analytic techniques, we find that versatile resources are associated with higher levels of growth, whereas VRIN resources are not. We offer novel insights into alternative characteristics of resources derived from the same conceptualization of the firm, add greater specificity to the performance construct, and open up avenues for new theorizing on firm growth that is more closely aligned with Penrose’s theory.
Integrating relational embeddedness arguments with Penrosean growth theory, we compare the growth of firms run by spousal entrepreneurs with firms run by sibling entrepreneurs. We theorize that ...trust, identification, and mutual obligations—the three facets of relational embeddedness—are more pronounced in spousal teams than in sibling teams, which provides spousal teams with advantages over sibling teams in generating firm growth. Probing a sample of all private firms in Sweden over a three-year period, we find support for this conjecture. Exploring boundary conditions to this baseline relationship, we also find that firm age weakens the growth advantages of spousal teams over sibling teams and that industry experience heterogeneity within the entrepreneurial team reinforces these growth advantages. These results provide important contributions for research on firm growth, the social embeddedness of firms, entrepreneurship, and family business.
•The underdog theory of entrepreneurship suggests that underdog entrepreneurs are less risk-averse.•Using a set of loan applications, this study tests the relationship between the underdog attributes ...of the entrepreneur and entrepreneurial growth aspirations.•We find support for our primary hypothesis that the underdog attributes of the entrepreneur are positively associated with entrepreneurial growth aspirations.•We also find that higher business income negatively moderates the relationship between the underdog attributes of the entrepreneur and entrepreneurial growth aspirations.
A growing number of studies suggest that underdogs have a propensity for entrepreneurship. However, the underdog entrepreneur’s propensity for firm growth after launching their ventures remains largely unknown. In this paper, we advance our understanding of underdog entrepreneurs by focusing on their entrepreneurial growth aspirations. More specifically, we leverage insights from the underdog theory of entrepreneurship, entrepreneurial growth aspirations, and prospect theory as a first step in uncovering the relationship between underdog attributes and firm growth. To test our model, we leverage a portfolio of loan applications from entrepreneurs based in the United States. Our findings suggest that underdog attributes are associated with growth aspirations, and higher business incomes negatively moderate this relationship.
Family Business Growth Around the World Miroshnychenko, Ivan; De Massis, Alfredo; Miller, Danny ...
Entrepreneurship theory and practice,
07/2021, Volume:
45, Issue:
4
Journal Article
Peer reviewed
Open access
Growth is important for the long-term success of a business. Regrettably, the impact of family influence on firm growth is largely neglected. We examine whether family firms have a higher growth rate ...than their nonfamily counterparts. Based on a large sample of firms across 43 countries over a 10-year period, we show that family firms on average have higher growth rates than nonfamily firms, and this positive effect is greater for family firms operating in strong national institutional environments which are less corrupt, more democratic, more subject to rule of law, and have effective government policies. We also find that the positive effect of family influence on firm growth varies significantly across different types of family firms and different business cycles. These findings show that family control has an economically significant impact on growth rates and important implications for both family firm theory and practice.
•Clarifying the relationship between organizational resilience and firm growth.•Strategic change mediates the link of organizational resilience and firm growth.•Managerial myopia mediates the link of ...organizational resilience and firm growth.•Environmental uncertainty moderates the link of organizational resilience and behavior.
Combining dynamic capability theory and the “capability-behavior-result” research logic, this study sheds light on the influence of organizational resilience on firm growth and how strategic change and managerial myopia mediate this relationship. Furthermore, the moderating role of environmental uncertainty is discussed. We employ a sample of A-share listed manufacturing companies in China during the period 2010–2020. The results demonstrate that organizational resilience promotes firm growth. Strategic change and managerial myopia play a mediating role between organizational resilience and firm growth. Environmental uncertainty positively moderates the relationship between organizational resilience and strategic change, but negatively moderates the relationship between organizational resilience and managerial myopia. Additionally, our findings indicate that the promotion effect of organizational resilience on firm growth is more significant in non-state-owned enterprises, small and medium-sized enterprises, and non-labor-intensive industries. This study offers practical implications for managers seeking sustainable development through organizational resilience.
This study investigates whether the individual attributes and investment approaches of business angels (BAs) affect the growth of funded companies by distinguishing between two firm types: gazelles ...and ponies. We draw upon an original data set comprising 265 small Italian firms (49 that received BA financing and 216 in the propensity score matched control group). Building on insights drawn from the resource-based view and absorptive capacity theory, we find that BAs with entrepreneurial experience positively affect the sales growth of gazelles only. Moreover, the role of BAs' investment experience and coaching in the growth rates of both gazelles and ponies is insignificant. Interestingly, monitoring helps boost ponies' performance but stifles growth among gazelles.
► We study the impact of venture capital investments on young high-tech firm growth. ► We disentangle the treatment and selection effect of venture capital (VC). ► A longitudinal dataset of 538 ...Italian young high-tech firms (NTBFs) is used. ► The treatment is of large magnitude while the selection effect appears to be negligible. ► Most of the impact is obtained immediately after the first round of VC finance.
The financial and innovation literature generally claims that venture capital (VC) investments spur the growth of new technology-based firms (NTBFs). However, it has proved difficult so far to separate the “treatment” effect of the VC investment from the “selection” effect attributable to the ability of the VC investor to screen high growth NTBFs. The aim of this work is to test whether VC investments have a positive treatment effect on the growth of employment and sales of NTBFs. For this purpose we consider a 10-year longitudinal data set for 538 Italian NTBFs, most of which are privately held. The sample includes both VC-backed and non-VC-backed firms. We estimate Gibrat-law-type dynamic panel-data models augmented with time-varying variables that capture the VC status of firms. To control for the endogeneity of VC investments we use several GMM estimators. The econometric results strongly support the view that VC investments positively influence firm growth. The treatment effect of VC investments is of large economic magnitude, especially on growth of employment. Most of it is obtained immediately after the first round of VC finance. Conversely, the selection effect of VC appears to be negligible in the Italian context.
This paper uses system dynamics modelling to explore processes through which entrepreneurial initiatives within firms lead to firm growth. Our model captures the interplay among various sub-processes ...and finds these processes form a complex system involving multiple interacting feedback processes. Simulation analysis shows that minor changes in firm conditions could lead to qualitatively different growth trajectories. They involve growth dynamics such as better before worse and worse before better scenarios. These findings prompt us to move beyond linear understanding of how entrepreneurship contributes to firm growth.
•Simulation of firm growth under different conditions for entrepreneurship.•Translation of theoretical constructs into the system dynamics language of stock-flows, time delays and feedback loops.•The same process mechanisms can lead to different growth paths under different conditions.•Application of system dynamics methods to entrepreneurship research.
We investigate the complementary roles of corporate governance; property, plant, and equipment (PPE) volatility; and intangible asset volatility in improving the returns from R&D volatility. With ...increasing R&D volatility, corporate governance can help align divergent goals and heterogeneous resources both internally and externally. PPE volatility or intangible asset volatility could help synchronize asset turnover with R&D volatility. The findings show that corporate governance and PPE volatility complement R&D volatility in improving a firm's performance.
•R&D volatility and firm performance association could be conditional on governance.•Moderators: Corporate governance, Intangible asset volatility, and PPE volatility•Sample is publicly traded firms (325 firms; 2003–2010) in the UK.•Corporate governance improves the R&D volatility and performance relation.•PPE asset volatility improves R&D volatility and performance relations.
PDF
