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 3: The effect of small business managers’ growth motivation on firm growth: a longitudinal study

Frédéric Delmar and Johan Wiklund

Subjects: business and management, entrepreneurship, strategic management


The psychological construct of motivation has an important role to play in entrepreneurship research. As stated by Shane, Locke, & Collins (2003, p. 257): ‘We believe that the development of entrepreneurship theory requires consideration of the motivations of people making entrepreneurial decisions.’ One of the areas in entrepreneurship where motivation is potentially of great importance relates to firm growth. There is research to suggest that growth is one of the most important outcomes of entrepreneurial efforts because it indicates the degree of success of that effort (Bhidé, 1999; Venkataraman, 1997), and effort exerted is closely related to the individual’s motivation (Davidsson, Delmar, & Wiklund, 2002). Research examining the link between growth motivation and growth appears to support this view as it finds a positive relationship between growth motivation and growth (e.g., Baum, Locke, & Kirkpatrick, 1998; Baum, Locke, & Smith, 2001; Kolvereid & Bullvag, 1996; Miner, Smith, & Bracker, 1989). Implicitly, the view underlying this research and the theories used is the assumption that growth motivation affects the future growth of the firm, i.e., that growth motivation has a causal effect on firm growth. However, in their review and test of leading theories on goal-directed behaviors, Bagozzi and Kimmel (1995) demonstrated that these theories are incomplete because they fail to consider the feedback from past behavior and behavioral outcomes.

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