High-growth SMEs versus non-high-growth SMEs: a discriminant analysis

The purpose of this paper is to analyse the main variables that allow one to distinguish between high-growth firms and non-high-growth firms. Theoretically, we discuss such differences through a combination of economic (external approach) and strategic (internal approach) visions. Empirically, this paper provides two differences with regard to previous literature: (1) the primary goal of our work is not to provide an outright explanation of firm growth; rather, we aim to establish what characteristics enable us to distinguish between high-growth and non-high-growth firms. This aspect determines the methodology used (discriminant analysis with dichotomic dependent variable); and (2) firm high growth is understood as an extraordinary growth in comparison with the average growth of other firms in the same industry, and not in absolute terms. The results show that in the main high-growth firms are different from moderate-growth firms or declining firms because of their smaller size (which is contrary to Gibrat's Law), their higher availability of idle resources (consistent with the theory of resources and capabilities), and in some cases, their lower availability of financial resources (consistent with the existing literature on entrepreneurship).