Growth factors of flemish enterprises: an exploratory study over the period 1993-1997

In this empirical study we investigated which company characteristics and which characteristics of population demography and firm location discriminate strongly and weakly growing firms in the Flemish part of Belgium. At the same time we examined whether existing governmental growth incentives actually are positively related to firm growth. Further, differences in growth between provinces and between industries in Flanders were analysed. Stepwise logistic regression was applied to growth categories identifying the 25% strongest and the 25% weakest growing companies on the investment level (growth in value added and total assets) and on the employment level (growth in the number of employees). The results show that a healthy financial situation is positively related to employment growth and especially investment growth. Governmental efforts to strengthen growth also seem to exhibit a positive relationship with either investment or employment growth. The height of the social security contributions--often indicated as the culprit for the weak international competitive position of Belgian firms--on the other hand seems to be negatively correlated with both growth measures. Further, we found evidence for significant correlations between demographic characteristics of the population as well as firm location and firm growth. Industry wise, the low growth performance of "wholesale trade, retail trade, hotels, restaurants and pubs, repair" (NACE division 6) and "other processing industries" (NACE division 4) became evident. Regionally, the figures show growth to be significantly weaker for firms situated around the central axis Antwerp-Brussels.