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Free to grow? Assessing the barriers faced by actual and potential high growth firms

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  • Lee, Neil

Abstract

A small proportion of high growth firms create the majority of all new jobs. For policymakers, it is important to know (1) the obstacles faced by high growth firms are and (2) the obstacles faced by firms with the potential to achieve high growth, but which are yet to achieve this. This investigates these issues using the UK Small Business Survey. It highlights six areas where high growth firms experience problems: obtaining finance, cash flow, recruiting staff, skill shortages, managerial skills and the availability and cost of premises. Potential high growth firms argue that cash flow, recruiting, the availability and cost of premises and managerial skills are important. They also argue that competition is a significant obstacle to their growth, perhaps implying their business strategy is problematic.

Suggested Citation

  • Lee, Neil, 2011. "Free to grow? Assessing the barriers faced by actual and potential high growth firms," MPRA Paper 36396, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:36396
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    File URL: https://mpra.ub.uni-muenchen.de/36396/2/MPRA_paper_36396.pdf
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    References listed on IDEAS

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    1. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    2. Magnus Henrekson & Dan Johansson, 2010. "Gazelles as job creators: a survey and interpretation of the evidence," Small Business Economics, Springer, vol. 35(2), pages 227-244, September.
    3. Bryson, Alex & Dorsett, Richard & Purdon, Susan, 2002. "The use of propensity score matching in the evaluation of active labour market policies," LSE Research Online Documents on Economics 4993, London School of Economics and Political Science, LSE Library.
    4. Coad, Alex & Rao, Rekha, 2008. "Innovation and firm growth in high-tech sectors: A quantile regression approach," Research Policy, Elsevier, vol. 37(4), pages 633-648, May.
    5. Lee, Neil & Nathan, Max, 2011. "Does cultural diversity help innovation in cities: evidence from London firms," LSE Research Online Documents on Economics 33579, London School of Economics and Political Science, LSE Library.
    6. Robert Bennett, 2008. "SME Policy Support in Britain since the 1990s: What have We Learnt?," Environment and Planning C, , vol. 26(2), pages 375-397, April.
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    Cited by:

    1. Fabio Pieri, 2015. "Vertical organization of production and firm growth behavior," Working Papers 1508, Department of Applied Economics II, Universidad de Valencia.
    2. Neil Lee & Andrés Rodríguez-Pose, 2014. "Creativity, Cities, and Innovation," Environment and Planning A, , vol. 46(5), pages 1139-1159, May.
    3. Giorgio Barba Navaretti & Davide Castellani & Fabio Pieri, 2014. "Age and firm growth: evidence from three European countries," Small Business Economics, Springer, vol. 43(4), pages 823-837, December.
    4. Brown, Ross & Lee, Neil, 2014. "Funding issues confronting high growth SMEs in the UK," LSE Research Online Documents on Economics 57264, London School of Economics and Political Science, LSE Library.
    5. Neil Lyee & Marc Cowling, 2015. "Do Rural Firms Perceive Different Problems? Geography, Sorting, and Barriers to Growth in UK SMEs," Environment and Planning C, , vol. 33(1), pages 25-42, February.
    6. Isabelle Roland, 2018. "Unlocking SME productivity: review of recent evidence and implications for the UK’s industrial strategy," CEP Industrial Strategy 05, Centre for Economic Performance, LSE.

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    More about this item

    Keywords

    High growth firms; Barriers; gazelles; SMEs; Firm growth;
    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

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