IDEAS home Printed from https://ideas.repec.org/a/sae/jouent/v18y2009i1p21-45.html
   My bibliography  Save this article

The Conceptualisation of Growth

Author

Listed:
  • Frank Janssen

    (Frank Janssen is Brederode Chair Professor of Entrepreneurship at Louvain School of Management, Catholic University of Louvain, Belgium.)

Abstract

Many different variables have been used to measure the firm's growth. Employment and sales are the two most used criteria within the literature on growth determinants. Most of the time, researchers do not provide any theoretical justification for using one or the other criterion and appear to use them interchangeably, as if they constituted equivalent representations of the same observable reality, that is, the firm's size. Using a sample of Belgian small and medium sized enterprises (SMEs), we have tested the interchangeability of these two criteria. Our results show that these two types of growth are determined by factors that are largely distinct. Organisational growth is thus shown to be a multifaceted phenomenon that cannot be reduced to a single dimension. This also means that growth cannot be measured through composite indicators, mixing different variables like sales or workforce, because they do not measure the same phenomenon. From a managerial point of view, this means that the resources that are mobilised and the strategies that are implemented by a firm should vary depending on whether it wishes to attain one or the other type of growth.

Suggested Citation

  • Frank Janssen, 2009. "The Conceptualisation of Growth," Journal of Entrepreneurship and Innovation in Emerging Economies, Entrepreneurship Development Institute of India, vol. 18(1), pages 21-45, March.
    • Handle: RePEc:sae:jouent:v:18:y:2009:i:1:p:21-45
    DOI: 10.1177/097135570801800102
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/097135570801800102
    Download Restriction: no
    File URL: https://libkey.io/10.1177/097135570801800102?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. James J. Chrisman & W. Ed McMullan, 2000. "A Preliminary Assessment of Outsider Assistance as a Knowledge Resource: The Longer-Term Impact of New Venture Counseling," Entrepreneurship Theory and Practice, , vol. 24(3), pages 37-53, April.
    2. Paul Westhead, 1995. "Survival and Employment Growth Contrasts between Types of Owner-Managed High-Technology Firms," Entrepreneurship Theory and Practice, , vol. 20(1), pages 5-28, October.
    3. Stephen Hymer & Peter Pashigian, 1962. "Firm Size and Rate of Growth," Journal of Political Economy, University of Chicago Press, vol. 70(6), pages 556-556.
    4. Brush, Candida G. & Chaganti, Radha, 1999. "Businesses without glamour? an analysis of resources on performance by size and age in small service and retail firms," Journal of Business Venturing, Elsevier, vol. 14(3), pages 233-257, May.
    5. Kumar, M S, 1985. "Growth, Acquisition Activity and Firm Size: Evidence from the United Kingdom," Journal of Industrial Economics, Wiley Blackwell, vol. 33(3), pages 327-338, March.
    6. Ajit Singh & Geoffrey Whittington, 1975. "The Size and Growth of Firms," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 42(1), pages 15-26.
    7. Evans, David S, 1987. "Tests of Alternative Theories of Firm Growth," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 657-674, August.
    8. Siegel, Robin & Siegel, Eric & Macmillan, Ian C., 1993. "Characteristics distinguishing high-growth ventures," Journal of Business Venturing, Elsevier, vol. 8(2), pages 169-180, March.
    9. Danny Miller & Jean-Marie Toulouse, 1986. "Chief Executive Personality and Corporate Strategy and Structure in Small Firms," Management Science, INFORMS, vol. 32(11), pages 1389-1409, November.
    10. Matthias Almus, 2002. "What characterizes a fast-growing firm?," Applied Economics, Taylor & Francis Journals, vol. 34(12), pages 1497-1508.
    11. Sue Birley & Paul Westhead, 1990. "Growth and performance contrasts between ‘types’ of small firms," Strategic Management Journal, Wiley Blackwell, vol. 11(7), pages 535-557, November.
    12. McCarthy, Anne M. & Schoorman, F. David & Cooper, Arnold C., 1993. "Reinvestment decisions by entrepreneurs: Rational decision-making or escalation of commitment?," Journal of Business Venturing, Elsevier, vol. 8(1), pages 9-24, January.
    13. Johan Wiklund, 1999. "The Sustainability of the Entrepreneurial Orientation—Performance Relationship," Entrepreneurship Theory and Practice, , vol. 24(1), pages 37-48, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Georgios Fotopoulos & Ioannis Giotopoulos, 2010. "Gibrat’s law and persistence of growth in Greek manufacturing," Small Business Economics, Springer, vol. 35(2), pages 191-202, September.
    2. Alex Coad, 2007. "Firm Growth: a Survey," Post-Print halshs-00155762, HAL.
    3. Blandina Oliveira & Adelino Fortunato, 2006. "Testing Gibrat's Law: Empirical Evidence from a Panel of Portuguese Manufacturing Firms," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 13(1), pages 65-81.
    4. Majumdar, Sumit K., 2004. "The hidden hand and the license raj to An evaluation of the relationship between age and the growth of firms in India," Journal of Business Venturing, Elsevier, vol. 19(1), pages 107-125, January.
    5. Louri-Dendrinou, Eleni & Fotopoulos, Georgios, 2002. "Corporate Growth and FDI: Are Multinationals Stimulating Local Industrial Development?," CEPR Discussion Papers 3128, C.E.P.R. Discussion Papers.
    6. Matteo Richiardi, 2004. "Generalizing Gibrat: Reasonable Multiplicative Models of Firm Dynamics," Journal of Artificial Societies and Social Simulation, Journal of Artificial Societies and Social Simulation, vol. 7(1), pages 1-2.
    7. Younsuk Park & Jaeun Shin & Taejong Kim, 2010. "Firm size, age, industrial networking, and growth: a case of the Korean manufacturing industry," Small Business Economics, Springer, vol. 35(2), pages 153-168, September.
    8. Alex Coad & Werner Hölzl, 2012. "Firm Growth: Empirical Analysis," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 24, Edward Elgar Publishing.
    9. D.B. Audretsch & L. Klomp & E. Santarelli & A.R. Thurik, 2004. "Gibrat's Law: Are the Services Different?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 24(3), pages 301-324, May.
    10. Liu, Jin-Tan & Tsou, Meng-Wen & Hammitt, James K., 1999. "Do small plants grow faster? Evidence from the Taiwan electronics industry," Economics Letters, Elsevier, vol. 65(1), pages 121-129, October.
    11. Canarella, Giorgio & Miller, Stephen M., 2018. "The determinants of growth in the U.S. information and communication technology (ICT) industry: A firm-level analysis," Economic Modelling, Elsevier, vol. 70(C), pages 259-271.
    12. Domínguez Jurado, José Miguel & Triguero-Ruiz, Francisco & Avila-Cano, Antonio, 2021. "Firm growth in the 21st century: Does the Andalusian economy comply with Gibrat’s Law?," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 577(C).
    13. John Sutton, 1996. "Gibrats Legacy," STICERD - Economics of Industry Papers 14, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    14. Bergner, Sören Martin & Bräutigam, Rainer & Evers, Maria Theresia & Spengel, Christoph, 2017. "The use of SME tax incentives in the European Union," ZEW Discussion Papers 17-006, ZEW - Leibniz Centre for European Economic Research.
    15. Mita Bhattacharya, 2014. "Business Growth, Size and Age: Evidence from the Business Longitudinal Survey (BLS) Data in Australia," Australian Economic Papers, Wiley Blackwell, vol. 53(3-4), pages 129-138, December.
    16. Giulio Bottazzi & Angelo Secchi, 2006. "Explaining the distribution of firm growth rates," RAND Journal of Economics, RAND Corporation, vol. 37(2), pages 235-256, June.
    17. Reid, Gavin C & Xu, Zhibin, 2009. "Growth and Survival Determinants of Chinese Private Firms: Fieldwork evidence and econometric estimates," SIRE Discussion Papers 2009-60, Scottish Institute for Research in Economics (SIRE).
    18. Chen, Tain-Jy & Ku, Ying-Hua, 2000. "The effect of foreign direct investment on firm growth: the case of Taiwan's manufacturers," Japan and the World Economy, Elsevier, vol. 12(2), pages 153-172, May.
    19. Buldyrev, Sergey V. & Salinger, Michael A. & Stanley, H. Eugene, 2016. "A statistical physics implementation of Coase׳s theory of the firm," Research in Economics, Elsevier, vol. 70(4), pages 536-557.
    20. Alex Coad & Stjepan Srhoj, 2020. "Catching Gazelles with a Lasso: Big data techniques for the prediction of high-growth firms," Small Business Economics, Springer, vol. 55(3), pages 541-565, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:jouent:v:18:y:2009:i:1:p:21-45. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: http://www.ediindia.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.