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Entrepreneurship, Sustainable Growth and Performance

Entrepreneurship, Sustainable Growth and Performance

Frontiers in European Entrepreneurship Research

Edited by Hans Landström, Hans Crijns, Eddy Laveren and David Smallbone

This book provides an invaluable, state-of-the-art overview of current European research in the field of entrepreneurship. It focuses on four themes, each of which illustrates a key dimension in the overall theme: • entrepreneurs and their role in entrepreneurship • entrepreneurship in family businesses • performance of new ventures and • entrepreneurial processes.

Chapter 15: Employment Growth of New Firms

Erik Stam, Petra Gibcus, Jennifer Telussa and Elizabeth Garnsey

Subjects: business and management, entrepreneurship


So far there have been no studies tracing the relationship between dynamic capabilities and the growth of new firms.1 There have been several empirical studies that analyse the factors associated with employment growth in new firms. These studies are summarized in Table 15.1. This table does not give an exhaustive overview of all the factors that have been used in these studies, but all factors that have been examined in at least two studies are represented. An overview of the characteristics of the samples on which these studies are based is provided in the appendix. We have categorized the factors associated with growth in employee numbers in new firms into three sets. Personal level factors include human capital, social capital and ambitions of the entrepreneur; firm level factors include organizational capital and financial capital; variables related to the business environment of the firm are industry or geographical location. Table 15.1 shows that the outcomes of these studies are very scattered: hardly any study takes a similar set of factors into account, and when the same factors are taken into account sometimes contrasting outcomes are presented. Consensus is to be found to the greatest extent regarding personal level factors. The human capital variables educational level, start-up experience, industry experience and technical experience have generally been found to have a positive relationship with growth.2 Being a female founder or belonging to an immigrant group has a negative association with firm growth. Social capital, especially in the form of starting a firm with...

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