New Perspectives on Firm Growth

New Perspectives on Firm Growth

Per Davidsson and Johan Wiklund

This insightful volume presents a collection of innovative works by two of the leading researchers of firm growth. The studies extend previous research by providing stronger theoretical underpinnings and using longitudinal databases that can separate in time the firms’ growth from its presumed causes. They also break new ground by examining different modes of growth, such as sales growth vs. employment growth, and organic growth vs. acquisition-based expansion. Further, the studies investigate the drivers of firm growth and take a critical look at the effects, such as under what circumstances high growth is associated with high profitability.

Chapter 2: Aspiring for, and achieving growth: the moderating role of resources and opportunities

Johan Wiklund and Dean A. Shepherd

Subjects: business and management, entrepreneurship, strategic management


In most economic literature, the economic motive is taken for granted; people act in ways to maximize their profits. Psychologists, concerned with all aspects of human behaviour, have a more diverse view of the motives underlying economic behaviour. In the small business context, this diverse view may be of particular importance. We know that people start and operate their own firms for a variety of reasons other than maximizing economic returns (Davidsson, 1989a; Delmar, 1996; Kolvereid, 1992; Storey, 1994). The fulfilment of non-economic personal goals, such as gaining independence or developing own ideas, are stated as primary reasons for operating one’s own firm (Douglas and Shepherd, 2000). Whether or not running a small firm actually leads to the fulfilment of personal goals is an open question. It depends on whether there is a strong link between the small business manager’s goals and motivations on the one hand and business outcomes on the other, i.e., the extent to which business outcomes are under volitional control. Small firm growth may be an area where volitional control is of particular interest. On the one hand, there is reason to believe that the personal motivation of the small business manager is linked to growth outcomes. Growth implies radical changes of the business characteristics.

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