Expectations and achievements in new firms
Journal of Small Business and Enterprise Development
ISSN: 1462-6004
Article publication date: 16 June 2017
Issue publication date: 11 August 2017
Abstract
Purpose
The purpose of this paper is to investigate the antecedents of business growth expectations and subsequent accumulated sales revenues and employment costs. Hypotheses are derived guided by the theory of planned behaviour.
Design/methodology/approach
The authors followed a sample of 207 incorporated businesses started in May/June 2002 over a ten-year period. The hypotheses are tested using hierarchical regression analysis.
Findings
The results suggest that the entrepreneurs’ need for social cohesion, subjective norm with regard to business growth and perceived self-efficacy with regard to opportunity recognition are positively and significantly associated with business growth expectations. These expectations, reported at the time of business registration, accurately predict subsequent short-term as well as long-term accumulated sales revenues and labour costs, but this is not the case for entrepreneurs with novel business ideas.
Practical implications
Since entrepreneurs’ attitude, subjective norm and self-efficacy are possible to change, the findings should interest policy makers and educators. Measures aimed at enhancing the antecedents of entrepreneurs’ growth expectations should be considered. The findings that growth expectations have a long-lasting effect on sales and employment stress the importance of entrepreneurs’ subjective expectations for outcomes in new businesses.
Originality/value
There is a lack of studies using a longitudinal design when investigating the link between initial business growth expectations and subsequent firm outcomes. This study contributes to the entrepreneurship literature in this regard by using high-quality secondary data to examine firm achievements.
Keywords
Citation
Kolvereid, L. and Isaksen, E.J. (2017), "Expectations and achievements in new firms", Journal of Small Business and Enterprise Development, Vol. 24 No. 3, pp. 649-668. https://doi.org/10.1108/JSBED-11-2016-0189
Publisher
:Emerald Publishing Limited
Copyright © 2017, Emerald Publishing Limited