Does the Environment Influence the Employment Growth of SMEs?
Journal of Small Business and Entrepreneurship 22, no. 3 (2009): pp. 311-326
17 Pages Posted: 11 Feb 2015
Date Written: 2009
Abstract
A great deal of empirical research has been devoted to the study of the impact of a firm’s environmental characteristics on its growth. However, most of this work focused on one or a few predictors. Furthermore, no research has provided an exhaustive list of all variables previously studied. We have tried to fill this gap and have tested on a sample of Belgian SMEs the potential influence of 15 variables on employment growth. On the basis of Mintzberg’s classification, we have grouped our variables into three sub-categories of determinants relating to the generosity or hostility of the environment, to its stability or dynamism and to its simplicity or complexity. Our results show that employment growth within SMEs is only influenced by two variables linked to the generosity sub-group. These also show that the environment, at least if it is studied independently, has only an extremely limited influence on the growth of SMEs. This leads us to question the validity of purely external approaches to firms’ employment growth, such as the theory of population ecology of organizations.
Suggested Citation: Suggested Citation