TY - JOUR
T1 - The persistence and dynamics of new venture growth
AU - Chen, Yan
AU - Song, Michael
N1 - Publisher Copyright:
© 2020, Springer Science+Business Media, LLC, part of Springer Nature.
PY - 2022/1
Y1 - 2022/1
N2 - Extensive research has suggested that new ventures’ growth rates lack persistence. However, existing studies tend not to differentiate between positive and negative growth rates or examine their respective persistence and dynamics. Building on performance feedback theory, we show that positive and negative growth rates exhibit different dynamics over time. Especially, negative growth rates are less likely to persist and more likely to reverse than positive ones. Furthermore, firm size and team size influence the persistence—or the lack of thereof—of both positive and negative growth rates. Specifically, new ventures that are smaller, as well as those managed by larger teams, are more likely to maintain positive growth and reverse negative growth, relative to their respective counterparts. Overall, this study suggests that positive and negative growth rates differ in their persistence and that new ventures can shape the dynamics of both positive and negative growth.
AB - Extensive research has suggested that new ventures’ growth rates lack persistence. However, existing studies tend not to differentiate between positive and negative growth rates or examine their respective persistence and dynamics. Building on performance feedback theory, we show that positive and negative growth rates exhibit different dynamics over time. Especially, negative growth rates are less likely to persist and more likely to reverse than positive ones. Furthermore, firm size and team size influence the persistence—or the lack of thereof—of both positive and negative growth rates. Specifically, new ventures that are smaller, as well as those managed by larger teams, are more likely to maintain positive growth and reverse negative growth, relative to their respective counterparts. Overall, this study suggests that positive and negative growth rates differ in their persistence and that new ventures can shape the dynamics of both positive and negative growth.
KW - Dynamic panel data model
KW - Growth dynamics
KW - Growth persistence
KW - New venture growth
KW - Performance feedback
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U2 - 10.1007/s11187-020-00411-2
DO - 10.1007/s11187-020-00411-2
M3 - Article
AN - SCOPUS:85092561246
SN - 0921-898X
VL - 58
SP - 303
EP - 322
JO - Small Business Economics
JF - Small Business Economics
IS - 1
ER -