Growth determinants in small firms: drawing evidence from the Indian agro-industry

Abstract

Purpose

This paper aims to study the growth determinants of small-sized agro-based firms in the Indian agro-industry.

Design/methodology/approach

The stratified random sampling method was used to collect information from sample agro-firms. A structured pretested questionnaire was designed to collect required data. Descriptive statistics and multivariate technique were used to analyze the data.

Findings

The major determinants of firm growth were firm size, managerial networking intensity, skill development of employees, product diversification and market integration. Employee skill development was found to be a significant predictor of firm growth in slow-growing firms, but held as a weak predictor of growth in fast-growing firms; whereas, use of information technology was a significant growth predictor in fast-growing firms and an insignificant growth predictor in slow-growing firms. To attain growth, small-sized agro-based firms should move from a traditional product-focus strategy to a flexible market-focus strategy.

Research limitations/implications

This study engaged a small sample size and focused only on the determinants of firm growth in the agro-industry, and mapped number of firm growth predictors. The implication of this study encourages more specific investigations with large samples, i.e. how each determinant influences firm growth in the agro-industry.

Practical implications

The study outcome would help agro-enterprises in designing strategies and aligning their current strategy with the desired strategy for firm growth.

Social implications

Policy makers especially engaged in self-employment and enterprise development can use the study outcome for policy planning.

Originality/value

In recent years, the electronic and computer industry in India has developed and reached to an unexpected height. The agro-industry, in contrast, is still struggling due to its inherent weakness and external threats. The need of the hour is to expedite firm-level competitiveness, managerial excellence and business strategy for growth and survival. Therefore, the present study based on survey data adds value to the firm growth strategies in the agro-industry.

Citation

Panda, D. (2015), "Growth determinants in small firms: drawing evidence from the Indian agro-industry", International Journal of Commerce and Management, Vol. 25 No. 1, pp. 52-66. https://doi.org/10.1108/IJCoMA-12-2012-0080