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The determinants of growth for SMEs. A longitudinal study from French manufacturing firms


  • Nadine Levratto
  • Luc Tessier
  • Messaoud Zouikri


This paper investigates the structural and strategic determinants of firm growth using a unique data set for French firms employing between 10 and 250 employees in 1997 and active over the period 1997-2007. Starting from the idea that firm growth is not only a random process but that some regularities may be emphasized, we consider a growth model that combines different elements presented as determinant in the firm’s growth path. Results based on two families of multinomial logit model do not confirm the conclusions about the exclusive role played by the previous size. In addition, thanks to the references to legal structure, market share and localization, one observes these variables shape strongly the individual growth path. However environment and structural elements are not the only elements to focus on in order to provide an explanation of the employment growth rate at the firm level. Strategic factors matter too. In particular we demonstrate the crucial role of labor costs and financial structure as explanatory variables of firm growth.

Suggested Citation

  • Nadine Levratto & Luc Tessier & Messaoud Zouikri, 2010. "The determinants of growth for SMEs. A longitudinal study from French manufacturing firms," EconomiX Working Papers 2010-28, University of Paris Nanterre, EconomiX.
  • Handle: RePEc:drm:wpaper:2010-28

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    References listed on IDEAS

    1. Alain Béraud & Gilbert Faccarello, 2000. "Nouvelle histoire de la pensée économique, tome 3," Post-Print halshs-00201476, HAL.
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    Cited by:

    1. José Miguel Giner & María Jesús Santa-María & Antonio Fuster, 2017. "High-growth firms: does location matter?," International Entrepreneurship and Management Journal, Springer, vol. 13(1), pages 75-96, March.
    2. Paloma Lopez-Garcia & Sergio Puente, 2012. "What makes a high-growth firm? A dynamic probit analysis using Spanish firm-level data," Small Business Economics, Springer, vol. 39(4), pages 1029-1041, November.
    3. Nadine LEVRATTO & Denis CARRÉ, 2013. "La Croissance Des Établissements Industriels : Une Question De Localisation," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 38, pages 93-120.

    More about this item


    Firm growth; SMEs; Gibrat’s law; French manufacturing; multinomial logistic regression;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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