Comparing young SMEs' growth determinants across regions

Abstract

Purpose

The aim of this study is to advance the understanding of firm growth determinants by comparing the factors influencing young firms' growth in 13 countries corresponding to three contrasting regions.

Design/methodology/approach

The authors propose an integrated model of venture growth where entrepreneurs' profile, firm resources and market characteristics are combined. This model is tested using three OLS regressions, one corresponding to each region.

Findings

The results show that compared with the remainder two regions, the less favorable business conditions verified in Latin American countries emphasize the relevance of entrepreneurs' human capital endowments in determining business development and its further growth. On the contrary, market‐related issues and the availability of financial resources are more important in South‐East Asia and Mediterranean Europe. Team size and particularly its growth are positively associated with firm growth in all the studied regions.

Practical implications

The results of this study confirm that a firm's growth determinants as well as their importance vary across regions. Consequently, policy interventions should take into account the specificity of each region when designing entrepreneurial policies, avoiding the adoption of “one size fits all” solutions.

Originality/value

The main contribution of this paper is twofold: first, it collects empirical evidence about young firm growth in less studied regions; second, by comparing the results for each region differential effects of several determinants of firm growth in quite contrasting contexts are discussed.

Citation

Federico, J., Rabetino, R. and Kantis, H. (2012), "Comparing young SMEs' growth determinants across regions", Journal of Small Business and Enterprise Development, Vol. 19 No. 4, pp. 575-588. https://doi.org/10.1108/14626001211277406