Analyzing non-linear dynamics of organic growth: Evidence from small German new ventures

  • Harald Habermann Department of Start-up Management Leuphana University of Lueneburg
  • Reinhard Schulte Department of Start-up Management Leuphana University of Lueneburg

Abstract

This paper links theories of growth models with the literature on serial autocorrelation of growth. We study the serial autocorrelation of tendencies of growth trajectories of employment and sales for German new ventures over a nine-year period using mosaic plots as a conceptual framework. The autocorrelation of growth tendencies provides important information on firms growth processes. We find that growing new ventures are subject to negative autocorrelation of tendencies of growth trajectories making sustained growth a very rare occurrence. This indicates that the growth of new ventures is non-linear, prone to interruptions, amplifying forces, and setbacks. Therefore, we interpret the commonly used term ‘stages of growth model’ in a different manner. A stage cannot be defined as a time span but rather as a sort of conditions of circumstances that are all present at a point in time and that are conditionally linked to a preceding sort of circumstances.

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Published
2017-06-19
How to Cite
HABERMANN, Harald; SCHULTE, Reinhard. Analyzing non-linear dynamics of organic growth: Evidence from small German new ventures. Journal of Small Business Strategy, [S.l.], v. 27, n. 2, p. 36-64, june 2017. ISSN 2380-1751. Available at: <http://libjournals.mtsu.edu/index.php/jsbs/article/view/582>. Date accessed: 21 may 2018.
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Articles