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Questioning the Growth Dogma: A Replication Study

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  • Cyrine Ben-Hafaïedh
  • Anaïs Hamelin

Abstract

Firm growth is overwhelmingly presented as positive. Policy-makers strongly support it, educators recommend it, and academics commonly use it as a measure of success. While it is demonstrated that high-growth firms contribute disproportionately to job creation and economic growth and that firm growth can be associated with superior outcomes, some scholars strongly caution against the growth-at-all-costs paradigm. Amongst them, Davidsson et al. (2009) notably showed that profitability first rather than growth first is a preferable strategy for achieving high overall performance. We replicate and extend this seminal study to a sample covering close to 40% of all EU small and medium firms. We confirm their results and show that they hold over a longer time span and even exhibit a path dependency-type effect to the initial strategy (growth-oriented or profit-focused). We also show that their results are robust to the use of alternative methodologies. These results have important implications for the theory and practice that we discuss.

Suggested Citation

  • Cyrine Ben-Hafaïedh & Anaïs Hamelin, 2023. "Questioning the Growth Dogma: A Replication Study," Entrepreneurship Theory and Practice, , vol. 47(2), pages 628-647, March.
    • Handle: RePEc:sae:entthe:v:47:y:2023:i:2:p:628-647
    DOI: 10.1177/10422587211059991
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    Cited by:

    1. Simon C. Parker & Thomas Åstebro & David B Audretsch & Robert Blackburn & Andrew Burke & Alex Coad & Marc Cowling & Per Davidsson & Michael Fritsch & Francis Greene & Paul D. Reynolds & Roy Thurik, 2024. "“Remembering David J Storey, a pioneer of the entrepreneurship field”," Small Business Economics, Springer, vol. 62(1), pages 1-21, January.
    2. Per Davidsson, 2023. "Making contributions: personal reflections from the co-creative evolution of entrepreneurship research," Small Business Economics, Springer, vol. 61(4), pages 1391-1410, December.
    3. David J. Storey & Martin Andersson & Magnus Henrekson & Sarah Jack & Mikael Stenkula & Karin Thorburn & Caroline Wigren-Kristoferson & Ivo Zander, 2023. "Per Davidsson: recipient of the 2023 Global Award for Entrepreneurship Research," Small Business Economics, Springer, vol. 61(4), pages 1381-1390, December.

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