Daskalopoulou, Irene and Petrou, Anastasia (2010): Entrepreneurial growth expectations and information flows in networks. Forthcoming in: Journal of Small Business and Enterprise Development
Download (174kB) | Preview
The study analyzes entrepreneur’s expectations regarding future growth by analyzing the relationship between information flows from networks and the perceived risk of decisions associated with the future size of a firm. The main proposition is that growth expectations might be the outcome of superior judgment stemming from privileged information derived from networks. To provide evidence in support of this hypothesis a sample selection model is estimated using a two-step estimation procedure. Cross-section questionnaire data are used in the empirical analysis. Evidence is provided on the role of inter-firm contacts and relationships as a mechanism able to assist entrepreneurs in better assessing and even reduce the risk and uncertainty associated with their present and future decisions regarding firm growth. The study provides evidence on the factors affecting expected growth rates while it explicitly formulates and tests the hypothesis that expectations regarding growth might be the outcome of superior judgment stemming from privileged information derived from networks. Analysis indicates that networks are indeed information mechanisms, however, such information should be specific to problem solving firm processes. Better informed entrepreneurs are those that foresee higher growth in the future, yet they are not blocked in only local networking.
|Item Type:||MPRA Paper|
|Original Title:||Entrepreneurial growth expectations and information flows in networks.|
|English Title:||Entrepreneurial growth expectations and information flows in networks.|
|Keywords:||small firms; expected growth; networks; information; Greece.|
|Subjects:||D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O18 - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
|Depositing User:||Irene / I.F. Daskalopoulou|
|Date Deposited:||14. May 2010 03:04|
|Last Modified:||19. Feb 2013 15:54|
Almus, M. and Nerlinger, E.A. (1999), “Growth of new technology-based firms: which factors matter?”, Small Business Economics,13, pp. 141-154.
Audretsch, D.B. (1997), “Technological regimes, industrial demography and the evolution of industrial structures”, Industrial and Corporate Change, 6: 49-82.
Audretsch, D.B., Klomp, L., Santarelli, E. and Thurik, A.R. (2004), “Gibrat’s Law: are the services different?”, Review of Industrial Organization, 24: 301-324.
Barringer, B.R. and Jones, F.F. (2004), “Achieving rapid growth – revisiting the managerial capacity problem”, Journal of Developmental Entrepreneurship, 9: 73-87.
Boschma, R.A. and Lambooy, J.G. (1999), “Evolutionary economics and economic geography”, Journal of Evolutionary Economics, 9: 411-429.
Brown, B. and Butler, J.E. (1993), “Networks and entrepreneurial development: the shadow of borders”, Entrepreneurship and Regional Development, 5: 101-116.
Butler, J.E. (1991), “A process-model expansion of the strategic management framework: the entrepreneurial influence”, Advances in Strategic Management, 7: 247-275.
Casson, M. (2005), “Entrepreneurship and the theory of the firm”, Journal of Economic Behaviour and Organization, 58, pp. 327-348.
Castells, M. (2004), “Informationalism, Networks, and the Network Society: A Theoretical Blueprint”, in Castells, M. (Ed.), The Network Society. A Cross-cultural Perspective, Edward Elgar, Cheltenham, UK, pp. 3-45.
Chaganti, R., Cook, R.G. and Smeltz, W.J. (2002), “Effects of styles, strategies, and systems on the growth of small businesses”, Journal of Developmental Entrepreneurship, 7, pp. 175-193.
Cooke, P. and Wills, D. (1999), “Small firms, social capital and the enhancement of business performance through innovation programmes”, Small Business Economics, 13, pp. 219 – 234.
Cressy, R. (1996), “Are business start-ups debt-rationed?”, Economic Journal, 106, pp. 1253-1270.
Davidsson, P., Kirchhoff, B., Hatemi-J, A. and Gustavsson, H. (2002), “Empirical analysis of business growth factors using Swedish data”, Journal of Small Business Management, 40, pp. 332-349.
Delmar, F., Davidsson, P. and Gartner, W.B. (2003), “Arriving at the high-growth firm”, Journal of Business Venturing, 18, pp. 189-216.
Dobbs, M. and Hamilton, R.T. (2007), “Small business growth: recent evidence and new directions”, International Journal of Entrepreneurial Behavior and Research, 13, pp. 296-322.
Dunne, P. and Hughes, A. (1994), “Age, size growth and survival: UK companies in the 1980s”, Journal of Industrial Economics, 42, pp. 115-140.
Evans, D.S. and Leighton, L.S. (1989), “Some empirical aspects of entrepreneurship”, American Economic Review, 79, pp. 519-535.
Evans, D.S. (1987a), “Tests of alternative theories of firm growth”, Journal of Political Economy, 95, pp. 657-674.
Evans, D.S. (1987b), “The relationship between firm growth, size and age: estimates for 100 manufacturing industries”, Journal of Industrial Economics, 35, pp. 567-581.
Freel, M.S. and Robson, P.J.A. (2004), “Small firm innovation, growth and performance”, International Small Business Journal, 22, pp. 561-575.
Fuellhart, K.G. and Glasmeir, A.K. (2003), “Acquisistion, assesemnt and use of business information by small- and medium-sized businesses: a demand perspective”, Entrepreneurship and Regional Development, 15, pp. 229-252.
Galaskiewicz, J., Wasserman, S., Rauschenbach, B., Bielefeld, W., and Mullaney, P. (1985), “The influence of corporate power, social status and market position on corporate interlocks in a regional network”, Social Forces, 64, pp. 403-431.
Gibrat, R. (1931), Les Inégalités Economiques, Librairie du Recueil Sirey, Paris.
Glancey, K. (1998), “Determinants of growth and profitability in small entrepreneurial firms”, International Journal of Entrepreneurial Behavior and Research, 4, pp. 18-27.
Greene, W. (1997), Econometric Analysis, 3rd Edition, New York, Prentice-Hall International.
Hall, B.H. (1987), “The relationship between firm size and firm growth in the US manufacturing sector”, Journal of Industrial Economics, 35, pp. 583-606.
Hamilton, R.T. and Lawrence, L. (2001), “Explaining size differences in smaller firms”, International Small Business Journal,19, pp. 49-60.
Hart, P.E. (2000), “Theories of firms’ growth and the generation of jobs”, Review of Industrial Organization, 17, pp. 229-248.
Heckman, J.J. (1979), “Sample selection bias as a specification error”, Econometrica, 47, pp. 153-161.
Heinonen, J. Nummela, N. and Pukkinen, T. (2004), To grow or not to grow? An analysis of internationally growth orientated Finnish SMEs. Paper presented at the EIBA Annual Conference, Slovenia, 5-8 December.
Huggins, R. (2000), “The success and failure of policy-implanted inter-firm network initiatives: motivations, processes and structure”, Entrepreneurship and Regional Development,12, pp. 111-135.
Johannisson, B. (1998), “Personal networks in emerging knowledge-based firms: spatial and functional patterns”, Entrepreneurship and Regional Development,10, pp. 297-312.
Johannisson, B. and Nilsson, A. (1989), “Community entrepreneurs: networking for local development”, Entrepreneurship and Regional Development,1, pp. 3-20.
Johnson, P., Conway, C. and Kattuman, P. (1999), “Small business growth in the short-run”, Small Business Economics, 12, pp. 103-112.
Jovanovich, B. (1982), “Selection and evolution of industry”, Econometrica,50, pp. 649-670.
Lang, J.R., Calantone, R.J. and Gudmundson, D. (1997), “Small firm information seeking as a response to environmental threats and opportunities”, Journal of Small Business Management,35, pp. 11-23.
LeBrasseur, R., Zanibbi, L. and Zinger, T.J. (2003), “Growth momentum in early stages of small business start-ups”, International Small Business Journal, 21, pp. 315-330.
Locke, S. (2004), “ICT adoption and SME growth in New Zealand”, Journal of American Academy of Business, 4, pp. 93-102.
Lotti, F., Snatarelli, E. and Vivarelli, M. (2003), “Does Gibrat’s Law hold among young, small firms”, Journal of Evolutionary Economics, 13, pp. 213-235.
Macpherson, A. and Holt, R. (2007), “Knowledge, learning and small firm growth: a systematic review of the evidence”, Research Policy, 36, pp. 172-192.
Phillips, B. and Kirchoff, B. (1989), “Formation, growth and survival: small firm dynamics in the US economy”, Small Business Economics, 1 (1), pp. 65-74.
Reichstein, T. and Dahl, M.S. (2004), “Are firm growth rates random? Analysing patterns and dependencies”, International Review of Applied Economics, 18 (2), pp. 225-246.
Robbins, D.K., Pantuosco, L.J., Parker, D.F. and Fuller, B.K. (2000), “An empirical assessment of the contribution of small business employment to US state economic performance”, Small Business Economics,15, pp. 293-302.
Robson, P.J.A., and Bennett, R.J. (2000), “SME growth: the relationship with business advice and external collaboration”, Small Business Economics, 15, pp. 193-208.
Rosa, P. and Scott, M. (1999), “The prevalence of multiple owners and directors in the SME sector: implications for our understanding of start-up and growth”, Entrepreneurship and Regional Development, 11 (1), pp. 21-38.
Smallbone, D. and Wyer, P. (2000), “Growth and Development in the Small Firm”, in Carter, S. and James-Evans, D. (Eds), Enterprise and Small Business, Prentice Hall, Harlow.
Storey, D. (1994), Understanding the Small Business Sector, Routledge, New York.
Street, C.T. and Cameron, A-F. (2007), “External relationships and the small business: a review of small business alliance and network research”, Journal of Small Business Management, 45, pp. 239-266.
Terleckyj, N.E. (1999), Measuring contribution of small business to industry job growth by data in business association directories, Office for Advocacy of the US Small Business Administration, Washington, DC.
Van Alstyne, M. and Bulkley, N. (2004) “Why Information Should Influence Productivity”, in Castells, M. (Ed.), The Network Society. A Cross-cultural Perspective, Edward Elgar, Cheltenham, UK, pp. 145-173.
Wiklund, J., Davidsson, P. and Delmar, F. (2003), “What do they think and feel about growth? An expectancy-value approach to small business managers’ attitudes toward growth”, Entrepreneurship Theory and Practice, 27, pp. 247-270.
Wooldridge, J.M. (2002), Econometric Analysis of Cross Section and Panel Data, The MIT Press, MA.