Drivers of SME performance: a holistic and multivariate approach

Olubunmi Ipinnaiye, Declan Dineen, Helena Lenihan

Research output: Contribution to journalArticlepeer-review

Abstract

To examine the drivers of small- and medium-sized enterprise (SME) growth, we adopt a holistic multivariate modelling approach, integrating macroeconomic determinants with the internal (firm characteristics and firm strategy) drivers more commonly investigated in firm growth studies. Utilising such an extended set of variables addresses a gap in the extant firm growth literature in relation to external growth factors, offering novel insights on the seeming randomness of firm growth. Our system generalised method of moments estimation results indicate that the macroeconomic environment influences firm growth both directly and indirectly. Based on the study of manufacturing SME growth in Ireland, our findings provide evidence on the integrated effects of macroeconomic conditions, firm characteristics and firm strategy for SME growth. They also highlight, from a theoretical perspective, the need to acknowledge the multidimensional nature of SME growth.

Original languageEnglish
Pages (from-to)883-911
Number of pages29
JournalSmall Business Economics
Volume48
Issue number4
DOIs
Publication statusPublished - 1 Apr 2017

Keywords

  • Business cycle
  • Firm growth
  • Firm size
  • Panel data
  • SMEs

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