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1 – 10 of 855Juanjuan Wang, Xiao Zhang and Yu Chi
This study aims to analyze the paths and mechanisms of firms’ sustainable high growth. Firms’ high growth is susceptible to interruption, stagnation or reversal. Thus, how firms…
Abstract
Purpose
This study aims to analyze the paths and mechanisms of firms’ sustainable high growth. Firms’ high growth is susceptible to interruption, stagnation or reversal. Thus, how firms can achieve sustainable high growth is an important topic that requires urgent discussion and has significant implications for sustainable economic development and employment.
Design/methodology/approach
This study applies a longitudinal case study approach to portray the process by which Jiashu orchestrated digital elements with traditional resources to continuously fulfill their user demands and ultimately achieve sustainable high growth.
Findings
This study reveals three resource orchestration strategies: trust-oriented, demand-oriented and efficiency-oriented. These strategies are adopted in an organization’s startup, expansion and maturity periods, respectively. By dynamically integrating and orchestrating digital elements with traditional resources, firms implement a growth strategy with expanding and stacking dimensions, leading to sustainable high growth. The replicability and connectivity resulting from orchestrating digital elements and traditional resources encourage firms to expand their dimensions of growth and achieve sustainable high growth in multiple dimensions.
Research limitations/implications
This study conducts a preliminary exploration of the relationship between the integration of digital and traditional elements and the sustainable high growth of enterprises. A more stable theoretical relationship between the two requires further multi-case studies and empirical analysis for substantiation.
Originality/value
This study first clarifies the concept of sustainable high growth and reveals a unique nonlinear path characterized by growth with expanding and stacking dimensions. The findings contribute to deepening the theories of sustainable high growth and resource orchestration in the digital economy era and offer practical implications for the sustainable high-growth practices of firms.
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Rachael E. Rees-Jones, Ross Brown and Dylan Jones-Evans
Research on high growth firms is booming yet a strong conceptual understanding of how these firms obtain (and sustain) rapid growth remains (at best) partial. The main purpose of…
Abstract
Purpose
Research on high growth firms is booming yet a strong conceptual understanding of how these firms obtain (and sustain) rapid growth remains (at best) partial. The main purpose of this paper is to explore the role founders play in enabling episodes of rapid growth and how they help navigate this process.
Design/methodology/approach
This paper reports the findings from a qualitative study involving in-depth interviews with entrepreneurs enlisted onto a publicly funded high growth business accelerator programme in Wales. These interviews explored the causes of the firms rapid growth, their key growth trigger points and the organisational consequences of rapid growth.
Findings
The research reveals that periods of high growth are intrinsically and inextricably inter-linked with the entrepreneurial traits and capabilities of their founders coupled with their ability to “sense” and “seize” pivotal growth opportunities. It also demonstrates founder-level dynamic capabilities enable firms to capitalise on pivotal “trigger points” thereby enabling their progression to a new “dynamic state” in a firm’s temporal evolution.
Originality/value
The novel approach towards theory building deployed herein is the use of theoretical elaboration as means of extending important existing theoretical constructs such as growth “trigger points” and founder dynamic capabilities. To capitalise on these trigger points, founders have to undergo a process of “temporal transitioning” to effectively manage and execute the growth process in firms. The work also has important policy implications, underlining the need for more relational forms of support for entrepreneurial founders.
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Diala Kabbara and Birgit Hagen
The purpose of this study is to explore the exogenous and endogenous drivers of the high-growth of Unicorn start-ups along their life cycle, with a particular focus on Unicorns in…
Abstract
Purpose
The purpose of this study is to explore the exogenous and endogenous drivers of the high-growth of Unicorn start-ups along their life cycle, with a particular focus on Unicorns in the fintech industry.
Design/methodology/approach
The study employs an explorative longitudinal analysis with a matched-pair of two cases of Unicorns start-ups with similar antecedent features to understand holistically drivers over the longer term.
Findings
High-growth patterns over the longer term are the result of a combined industry- and company-life cycle perspective. Drivers and growth patterns vary significantly according to the time of entry in the industry and its development status. The findings are systematised within a set of propositions to be tested in future research.
Research limitations/implications
The limitations lie in empirical evidence, as the analysis is limited to one-matched-pair. The revealed Unicorns' drivers for long-term growth might encourage future research to further investigate these drivers on a larger scale.
Practical implications
The study offers practical recommendations for start-ups with high-growth ambitions and advice to policy makers regarding the development of tailor-made support programs.
Originality/value
The study significantly extends extant work on growth and high-growth by examining endogenous and exogenous triggers over time and by linking the Unicorn-life cycle to the industry life cycle, an approach which has, to the best of the authors’ knowledge, not yet been applied.
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Margarida P. Santos, Fernando A. F. Ferreira, Neuza C. M. Q. F. Ferreira, João J. M. Ferreira and Ieva Meidutė-Kavaliauskienė
Gazelle companies are characterized by rapid growth in a short time. Identifying the determinants of this exponential expansion is important as these firms have a significant…
Abstract
Purpose
Gazelle companies are characterized by rapid growth in a short time. Identifying the determinants of this exponential expansion is important as these firms have a significant impact on the economy. They generate increased employment and investment by investors interested in new opportunities. Previous studies have failed to reach a consensus about what fosters high growth in gazelle companies as each firm’s geographical, political and economic context is different. The present research uses cognitive mapping and interpretive structural modeling (ISM) to overcome the limitations of prior investigations and identify factors that can potentially accelerate growth in gazelle companies.
Design/methodology/approach
Two sessions were held with an expert panel with knowledge about and experience with these firms. In the first session, data were collected to create a group cognitive map, while the second meeting comprised ISM-based analyses of the high-growth determinants identified and the causal relationships between them. A final consolidation session was held to discuss the results with two members of the Committee for Central Region Coordination and Development (i.e. Comissão de Coordenação e Desenvolvimento Regional do Centro – a public entity that grants gazelle awards in Portugal).
Findings
The analysis system created was tested, and the results demonstrate that the dual methodology used can increase our understanding of the dynamics of high-growth determinants and lead to more informed and potentially better evaluations of gazelle companies. Indeed, once high-growth determinants in gazelle companies are understood, this information can help other firms implement the same business model to achieve similarly rapid growth. The strengths and shortcomings of this new structured analysis model are also analyzed.
Originality/value
The authors know of no prior work reporting the integrated use of cognitive mapping and ISM in this study context.
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Chongryol Park, Ronald McQuaid and Suzanne Mawson
This paper explores key factors influencing high-performing, sustained growth, high-tech small- and medium-sized enterprises (SMEs) in South Korea.
Abstract
Purpose
This paper explores key factors influencing high-performing, sustained growth, high-tech small- and medium-sized enterprises (SMEs) in South Korea.
Design/methodology/approach
A qualitative study is adopted to explore seventeen founder owner-managers of high-tech SMEs who sustained consistent employment growth, greater than the industry average, for seven years. Within the sample, those with higher (10% or over) employment compound annual growth rates (CAGRs) over this period are also compared to those with lower rates.
Findings
The study suggests that proactive approaches, such as flexible organization, risk management, fast decision-making and international market entry, are seen as important contributing factors to sustained growth. These findings contribute to a better theoretical and empirical understanding of sustained high-tech SME growth, in a country with a strong entrepreneurial and internationally competitive information technology sector. Also, collaboration across the SME was perceived as making an important contribution to staff development and growth, consistent with stewardship theory.
Research limitations/implications
The sample is based on successful high-tech SMEs, so there are limitations in extrapolating results to other types of firms, sectors or countries.
Practical implications
Key factors identified in this study can be considered by entrepreneurs seeking to achieve sustainable business. These also provide improved understanding for policymakers into the complexity of factors related to sustained and high growth of technology-based SMEs, which many countries are keen to foster to aid national economic growth.
Originality/value
The research provides new evidence exploring the diverse perspectives of founder owner-managers, on the sustained growth and failure in South Korean high-tech SMEs, and how these have changed since the inception of their business.
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Muhammad Nouman, Ijaz Ahmad, Muhammad Fahad Siddiqi, Farman Ullah Khan, Mohammad Fayaz and Idrees Ali Shah
The financial policies of the modern world corporations and their investment decisions are generally considered as interrelated because the agency problems, associated with the…
Abstract
Purpose
The financial policies of the modern world corporations and their investment decisions are generally considered as interrelated because the agency problems, associated with the debt level and its maturity structure, give rise to incentives for overinvestment or underinvestment. The present study empirically investigates the linkage between debt maturity structure and firm investment in a financially constrained environment, using Pakistan as a case study, to determine how the institutional environment in which firms operate affect these decisions and their linkage.
Design/methodology/approach
The empirical analysis is carried in a panel data setting using panel regression models as the baseline methods. Moreover, generalized methods of moments (GMM) estimators are used, coupled with the instrumental variables approach, for robustness and improving the efficiency and consistency of estimates.
Findings
Results suggest that firms rely more on short financing in Pakistan. Thus, given the capital structure which is characterized by higher proportion of short-term financing, the higher level of leverage is less likely to cause underinvestment problem. However, the underinvestment problem do persists in the firms that have higher portion of long-term debt. These findings imply that the debt-overhang problem may persist even in the financially constrained environments where attractive investment opportunities are limited, and long-term financing is difficult to acquire.
Originality/value
This study contributes to the literature by revealing how corporate investment and financing decisions and their linkage is influenced by the institutional environment of the less developed countries which is characterized by underdeveloped financial markets, inefficient legal system and weak investor protection system.
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Zilong Liu, Hongyan Liang and Chang Liu
In theory, the impact of debt liquidity risk (DLR) on the firm's future growth is ambiguous. This study aims to examine the empirical relationship between the DLR and firms'…
Abstract
Purpose
In theory, the impact of debt liquidity risk (DLR) on the firm's future growth is ambiguous. This study aims to examine the empirical relationship between the DLR and firms' growth rate using annual data for USA companies from 1976 to 2020.
Design/methodology/approach
Given the longitudinal nature of the data, the author uses OLS (ordinary least squares) regression methodology with fixed effects to control for unobserved characteristics that might affect the dependent variable. Instrument variable regression is also used to address the potential endogeneity problem.
Findings
The results show that firms having higher DLR, as proxied by more short-term debt, experience lower growth rate. An increase in firms' short-term debt decreases the firms' future growth rate as evidenced by lower assets, revenue and employee growth rate. Moreover, the authors' results show that small firms or firms with more investment opportunities grow fast if the firms take higher DLR. Finally, cyclical firms with higher DLR exhibit lower growth rate during the credit tighten period. The authors' results hold for both the pre-zero lower bound (ZLB) era and ZLB period.
Originality/value
To the authors' best knowledge, this is one of the earliest studies to carefully examine the effects of DLR on firms' growth rate. While prior research finds that firms with higher growth potential, measured by market-to-book (MTB) ratio, use more short-term debt, the authors' research directly addresses whether DLR affects firms' future growth rate. The authors’ findings also help explain why firms with high growth potential use more short-term debt.
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Mubashir Ali Khan, Josephine Tan-Hwang Yau, Aitzaz Ahsan Alias Sarang, Ammar Ali Gull and Muzhar Javed
This study aims to examine the extent to which information asymmetry affects investment efficiency and whether the presence of blockholders moderate this relationship.
Abstract
Purpose
This study aims to examine the extent to which information asymmetry affects investment efficiency and whether the presence of blockholders moderate this relationship.
Design/methodology/approach
We employ the data of firms listed on the Malaysian stock exchange for the period 2010–2018, to compose our sample. Our final sample includes the 100 largest non-financial firms based on market capitalization. Collectively, these 100 companies contribute 84.2% to the total market capitalization (MYR 1,730bn) which is representative of the whole market. The ordinary least squares regressions were used as the main estimation technique. The system generalized method of moments, two-stage least squares and propensity score matching were also used, to address potential endogeneity concerns.
Findings
We document a positively significant association of information asymmetry with investment inefficiency. These results imply that information asymmetry reduces investment efficiency and enhances sub-optimal investments. We also document that blockholders negatively moderate the relationship of information asymmetry with investment inefficiency. Further analyses show that investment inefficiency is higher in low-growth firms than in high-growth firms because of higher information asymmetry.
Research limitations/implications
We focus on Malaysia, which is a predominantly common-law Anglo-Saxon country. Graff (2008) documented that the investors are treated differently across legal systems and there are differences between the continental European and Anglo-Saxon countries. La Porta et al. (1999) documented that investors tend to have more legal protection in Anglo-Saxon countries. Therefore, our results may not be generalized to countries with different legal systems.
Practical implications
An important implication of our findings is that stakeholders may encourage the presence of blockholders and give them a voice to weaken the positive relationship between information asymmetry and investment inefficiency.
Originality/value
This study contributes to the contingency literature by investigating the moderating effect of an important governance mechanism, i.e. the presence of blockholders on information asymmetry-investment efficiency nexus. Despite being important, this moderating effect has been largely overlooked in the literature. Our study contributes by providing an understanding of how blockholders can influence investment decisions, offering insights for academics, investors and policymakers focused on improving the efficacy of investment decisions and governance structure.
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The current paper extends previous studies on the match between CEO and firm and explores whether certain characteristics of young CEOs make them more desirable to young firms…
Abstract
Purpose
The current paper extends previous studies on the match between CEO and firm and explores whether certain characteristics of young CEOs make them more desirable to young firms. Results in this paper will provide useful information to startup companies when they need to find managers leading the firms.
Design/methodology/approach
This study use a large sample of panel regression to study the match between CEOs and firm via a difference-in-differences approach.
Findings
The author finds that young firms hire a disproportionately higher percentage of young CEOs than established firms. Young firms led by young CEOs exhibit higher growth rates in sales and assets and invest more in capital expenditure and R&D activities than similar firms led by older CEOs. Young CEOs in young firms also receive higher compensation than both older CEOs working in young firms and young CEOs working in established firms.
Originality/value
There are many studies examining how CEO age affect their decision-making process. There are also many studies examining the differences between young firms and established firms. However, there is no study so far examining the intersection of the two questions above. Specifically, whether the differences between young vs established firms make certain characteristics of young CEOs beneficial to young firms.
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Neeraj Jain and Smita Kashiramka
This study aims to investigate the effects of peers on corporate payout policies in one of the largest emerging markets – India. It also examines the motives for mimicking payout…
Abstract
Purpose
This study aims to investigate the effects of peers on corporate payout policies in one of the largest emerging markets – India. It also examines the motives for mimicking payout decisions.
Design/methodology/approach
The sample is composed of 3,024 non-financial and non-government firms listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) for the period 1995 to 2020. To encounter the endogeneity problem, the instrumental variable technique based on peer firms' idiosyncratic risk is used to estimate the effects of peers on firms' payout policy. To define peer reference groups, the authors use the basic industry classification of the firms.
Findings
The results indicate a significant positive impact of peers on firms' dividend policies in India. A firm with all dividend-paying peers is more likely to declare dividends than the one with no dividend-paying peers. Further, peer effects are found to be more pronounced amongst larger and older firms, thus supporting the rivalry theory of mimicking.
Originality/value
To the best of the authors' knowledge, the present study is the first of its kind that attempts to understand peer effects on payout decisions in an emerging market India, that offers a unique institutional setting. Moreover, the authors extend the existing literature by investigating the peer effects on a firm's payout policies considering various firm-level characteristics, such as growth opportunity, cash holding, financial constraint and profitability, which previous studies have not taken into consideration. These results provide additional insights into the heterogeneity and motives behind peer effects.
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