Skip to main content
SpringerLink
Log in

Small Business Growth in the Short Run

  • Published:
Small Business Economics Aims and scope Submit manuscript

Abstract

This paper examines the determinants of short run employment growth in very small firms in the Services sector. The study shows evidence of non linearities in the growth-size relationship, and it is argued that these non linearities reflect the short run constraints that small firms face in adjusting to demand shocks. The paper also suggests that there are other systematic influences on growth apart from size. The paper draws on survey evidence from the Northern Region of the United Kingdom.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • Adams, G. and G. Hall, 1993, 'Influences on the Growth of SMEs: An International Comparison', Entrepreneurship and Regional Development 5, 73–84.

    Google Scholar 

  • Audretsch, D. B., 1995, 'Innovation, Growth and Survival', International Journal of Industrial Organization 13, 441–457.

    Google Scholar 

  • Audretsch, D. B. and Z. Acs, 1990, 'The Entrepreneurial Regime, Learning and Industry Turbulence', Small Business Economics 2, 119–128.

    Google Scholar 

  • Barkham, R., G. Gudgin, M. Hart and E. Harvey, 1996, The Determinants of Small Firm Growth.An Inter-Regional Study in the United Kingdom 1986–90. Regional Policy and Development Series 12, Regional Studies Association. Jessica Kingsley Publishers, London.

    Google Scholar 

  • Beesley, M. E. and R. T. Hamilton, 1984, 'small Firms' Seedbed Role and the Concept of Turbulence', Journal of Industrial Economics XXXIII, 217–231.

    Google Scholar 

  • Caree, M. and L. Klomp, 1996, 'small Business and Job Creation: A Comment', Small Business Economics 8, 317–332.

    Google Scholar 

  • Daly, M., 1990, 'The 1980s – a Decade of Growth of Enterprise', Employment Gazette 98, 553–565.

    Google Scholar 

  • Davis, S. J., J. Haltiwanger and S. Schuh, 1996, 'small Business and Job Creation: Dissecting the Myth and Reassessing the Facts', Small Business Economics 8, 297–315.

    Google Scholar 

  • Deakins, D. and G. Hussain, 1993, 'Overcoming the Adverse Selection Problem: Evidence and Policy Implications from a Study of Bank Managers on the Importance of Different Criteria Used in Making a Lending Decision', in F. M. Chittenden, M. Robertson and D. Watkins (eds.), Small Firms: Recession and Recovery, London: Paul Chapman Publishing, pp. 177–187.

    Google Scholar 

  • Dobson, S. and B. Gerrard, 1989, 'Growth and Profitability in the Leeds Engineering Sector', Scottish Journal of Political Economy 36, 334–349.

    Google Scholar 

  • Dunne, P. and A. Hughes, 1994, 'Age, Size, Growth and Survival: U.K. Companies in the 1980s', Journal of Industrial Economics XLII, 115–140.

    Google Scholar 

  • Ericson, R and A. Pakes, 1995, 'Markov-perfect Industry Dynamics: A Framework for Empirical Work', Review of Economic Studies 62, 53–82.

    Google Scholar 

  • Evans, D. S., 1987, 'The Relationship between Firm Growth, Size, and Age: Estimates for 100 Manufacturing Industries', Journal of Industrial Economics XXXV, 567–581.

    Google Scholar 

  • Geroski, P. A., 1995, 'What Do We Know about Entry?', International Journal of Industrial Organization 13, 421–440.

    Google Scholar 

  • Hakim, C., 1989, 'Identifying Fast Growth Small Firms', Employment Gazette 97, 29–41.

    Google Scholar 

  • Hall, B. H., 1987, 'The Relationship between Size and Firm Growth in the U.S. Manufacturing Sector', Journal of Industrial Economics XXXV, 583–606.

    Google Scholar 

  • Hart, P. E. and N. Oulton, 1996, 'Growth and Size of Firms', Economic Journal 106, 1242–1252.

    Google Scholar 

  • Hay, D. and D. Morris, 1990, Industrial Economics and Organization, Oxford: Oxford University Press.

    Google Scholar 

  • Hopenhayn, H. A., 1992, 'Entry, Exit and Firm Dynamics in Long Run Equilibrium', Econometrica 60, 1127–1150.

    Google Scholar 

  • Ijiri, Y. and H. A. Simon, 1977, Skew Distributions and Sizes of Business Firms, Amsterdam, North-Holland.

    Google Scholar 

  • Johnson, P. S. and V. Conway, 1995, End of Award Report to the ESRC (R000234670): A Cohort Study of Recently Formed Businesses: the First Stage, mimeo.

  • Johnson, P. S. and C. Conway, 1997, 'How Good are the U.K. VAT Registration Data at Measuring Firm Births?', Small Business Economics 9, 403–409.

    Google Scholar 

  • Jovanovic, B., 1982, 'selection and Evolution of Industry', Econometrica 50, 649–670.

    Google Scholar 

  • Keasey, K. and R. Watson, 1994, 'The Bank Financing of Small Firms in the U.K.: Issues and Evidence', Small Business Economics 6, 349–362.

    Google Scholar 

  • Keeble, D., P. Tyler, G. Broom and J. Lewis, 1992, Business Success in the Countryside. London: Department of the Environment.

    Google Scholar 

  • Marshall, A., 1920, The Principles of Economics, 8th edn., reset 1949. London: Macmillan.

    Google Scholar 

  • Mason, C. and R. Harrison, 1993, 'spatial Variations in the Role of Equity Investments in the Financing of SMEs', in J. Curran and D. Storey (eds.), Small Firms in Urban and Rural Locations, London: Routledge.

    Google Scholar 

  • Mata, J., 1994, 'Firm Growth during Infancy', Small Business Economics 6, 27–39.

    Google Scholar 

  • Reid, G. C., 1993, Small Business Enterprise.An Economic Analysis, London: Routledge.

    Google Scholar 

  • Reid, G. C., 1995, 'Early Life-cycle Behaviour of Micro-firms in Scotland', Small Business Economics 7, 89–95.

    Google Scholar 

  • Risseeuw, P. and E. Masurel, 1994) 'The Role of Planning in Small Firms: Empirical Evidence from a Service Industry', Small Business Economics 6, 313–322.

    Google Scholar 

  • Scherer, F. M. and D. Ross, 1990, Industrial Market Structure and Economic Performance, Boston: Houghton Mifflin Company.

    Google Scholar 

  • Storey, D. J., R. Watson and P. Wynarczyk, 1989, Fast Growth Businesses: Case Studies of 40 Firms in Northern England, Department of Employment, Research paper No 67, (1989), London.

  • Storey, D., 1994, Understanding The Small Business Sector, London: Routledge.

    Google Scholar 

  • Sutton, J., 1997, 'Gibrat's Legacy', Journal of Economic Literature 35, 40–59.

    Google Scholar 

  • Variyam, J. N. and D. S. Kraybill, 1992, 'Empirical Evidence on Determinants of Firm Growth', Economic Letters 38, 31–36.

    Google Scholar 

  • Wagner, J., 1994, 'The Post-entry Performance of New Small Firms in German Manufacturing Industries', Journal of Industrial Economics 42, 141–154.

    Google Scholar 

  • Woo, C. Y., A. C. Cooper, W. C. Dunkelberg, U. Daellenwach and W. J. Dennis, 1989, 'Determinants of Growth for Small and Large Entrepreneurial Start-ups', paper presented at Babson Entrepreneurship Conference.

Download references

Author information

Authors and Affiliations

  1. Department of Economics, University of Durham, 23/26 Old Elvet, Durham, DH1 3HY, U.K

    Peter Johnson, Cheryl Conway & Paul Kattuman

Authors
  1. Peter Johnson
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Cheryl Conway
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Paul Kattuman
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Johnson, P., Conway, C. & Kattuman, P. Small Business Growth in the Short Run. Small Business Economics 12, 103–112 (1999). https://doi.org/10.1023/A:1008006516084

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1008006516084

Keywords

Search

Navigation