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What holds back high-growth firms? Evidence from UK SMEs

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  • Neil Lee

Abstract

High-growth firms are seen as vital for economic growth. It is important for policy and theory to consider the barriers faced by firms achieving high growth and those with the potential to do so. This article uses data for 4,858 UK SMEs to investigate the obstacles perceived by two sets of firms: (1) firms in periods of high growth and (2) potential high-growth firms, which are observationally similar but are not achieving high growth. The results suggest high-growth firms perceive problems in six areas: recruitment, skill shortages, obtaining finance, cash flow, management skills and finding suitable premises. Potential high-growth firms feel held back by the economy, obtaining finance, cash flow and their management skills, but are less likely to perceive regulation is a problem. The results have implications for theory on high-growth firms and policies focussed at them. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Neil Lee, 2014. "What holds back high-growth firms? Evidence from UK SMEs," Small Business Economics, Springer, vol. 43(1), pages 183-195, June.
    • Handle: RePEc:kap:sbusec:v:43:y:2014:i:1:p:183-195
    DOI: 10.1007/s11187-013-9525-5
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    More about this item

    Keywords

    High-growth firms; Barriers to growth; Gazelles; SMEs; Entrepreneurship; L0; D21; L2; L10; L26;
    All these keywords.

    JEL classification:

    • L0 - Industrial Organization - - General
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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