Factors that determine the evolution of high-growth businesses

Abstract

Objective: The study herein discusses research aimed at elucidating the factors that contribute to a business’ ability to maintain high growth.

Design/Methodology/Perspective: The database from the Iberian Balance Sheet Analysis System (SABI, from its initials in Spanish) was used to identify 250 industrial Catalonian businesses with high growth during 2004-2007. These companies participated in a survey on strategies and management practices; in 2013, they were re-analyzed to investigate the factors that contributed to continued growth for certain companies.

Contributions: Through diverse statistical techniques, business policies related to quality, innovation, internationalization and finance were shown to influence business growth and sustainability over time.

Limitations of the Research: This study focuses on industrial businesses at least ten years old in Catalonia; thus, the conclusions may differ in other geographic locations and economic sectors, as well as for smaller businesses.

Practical Implications: Because growth is a measure of business success, identifying variables that contribute to high growth and its sustainability is helpful for businesses that seek to adopt effective policies.

Social Implications: Generating employment is one of the primary contributions by high-growth businesses. For years with high unemployment, authorities may be interested in corporate policies that strengthen high-growth businesses.

Originality/Added Value: High-growth businesses have been studied throughout the world, but this is the first study to investigate the evolution of businesses after a high-growth phase.