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The starting point of this study is Gibrat’s Law, which is contrasted with strategic management. This logic is subsequently applied to a group of remarkably dynamic, high-growth firms: gazelles. Strategic management theory emphasises the importance of firms adjusting strategies in response to changes in the external environment. In our study, it is used to explain several key empirical findings using a novel British data set containing information on more than 100 gazelles. These findings help explain: (1) why Gibrat’s Law of random firm growth processes does not generally hold, (2) which strategy and environmental variables have a predictable influence on firm performance and (3) why routine application of ‘best practice’ strategies is unlikely to foster firm growth in a changing economic environment. In so doing, this paper contributes to the large body of literature on small-firm growth.
Small Business Economics – Springer Journals
Published: Jan 5, 2010
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