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The risk of growing fast

  • Jan de Kok
  • Haibo Zhou
  • Chantal Hartog

Are firm growth and firm survival related to each other? This paper tests the hypothesis that the relationship between firm growth and firm survival can be characterised by an inverted U-shaped relation. This hypothesis is confirmed by our estimations. At the same time, the results indicate that the top of the inverted U-shaped relation occurs at very high growth rates. This suggests that for the large majority of enterprises, the relationship between firm growth and firm survival can be better described by a positive relationship rather than an inverted U-shaped relationship. Although these results are preliminary, they suggest that policies that aim to increase the number of fast-growing firms have no negative effects on the rate of firm deaths.

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File URL: http://www.entrepreneurship-sme.eu/pdf-ez/H201119.pdf
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Paper provided by EIM Business and Policy Research in its series Scales Research Reports with number H201119.

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Length: 36 pages
Date of creation: 02 Feb 2012
Date of revision:
Handle: RePEc:eim:papers:h201119
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  16. Robson, Paul J A & Bennett, Robert J, 2000. " SME Growth: The Relationship with Business Advice and External Collaboration," Small Business Economics, Springer, vol. 15(3), pages 193-208.
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