Dice thrown from the beginning? An empirical investigation of determinants of firm level growth expectations

  • Siri Terjesen


This study investigates three competing but complementary perspectives on factors
related to entrepreneurial firm growth. We examine individual (entrepreneur)
firm and national environment factors associated with the growth expectations
of nascent, baby and established firms. Using 25,384 data points from Global
Entrepreneurship Monitor (GEM)’s survey of entrepreneurial activity in 35
countries, we find male gender, personal acquaintance with an entrepreneur,
innovative product/service, low levels of competition and based in less-developed
countries are associated with high growth expectations for all three business
stages. Nascent and baby firms’ business growth expectations are also linked to
having higher levels of start-up capital and outside investment. In contrast to
some previous research, we find that a firm’s initial size is the best predictor of
growth expectations. Altogether, size-related factors determine not only initial
growth expectations, but also growth expectations at later firm stages. The law
of disproportionate growth (i.e. a small number of firms are responsible for
most expected job creation) holds for both start-ups and established businesses,
although the latter are more rare. While both start-up and established firm
growth expectations are higher in the developing countries, the fastest growing
young firms are mainly found in developed countries.
Keywords Entrepreneurship, firm growth expectations, develop vs. developing countries
How to Cite
Terjesen, S. (2016). Dice thrown from the beginning? An empirical investigation of determinants of firm level growth expectations. Estudios de Economía, 35(2), pp. 153-178. Retrieved from https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/40241/43435