Navigating the growth trajectory: A study on the link between growth intentions and small business growth in China

Abstract

The intentions of entrepreneurs have been widely studied as potent predictors and preconditions for launching and developing a business. It is argued that intention is just as important for owner-managers of existing ventures as it is for entrepreneurs considering starting a new venture. There is wide acknowledgement that small business entrepreneurs are often endowed with a wide array of roles and responsibilities and are, therefore, critical for business development and firm growth. However, existing studies investigating the link between individual-level factors and firm-level performance are highly fragmented, and very little is known about the link between growth intention and firm growth, and to what extent growth intention affects small business growth. To address these research gaps, this thesis integrates several theoretical notions to create a conceptual framework based on theoretical insights and aims to clarify the relationship between growth intention and firm growth. Additionally, the study delves into the influence of firms’ strategic postures and external network resources on the relationship between growth intention and firm growth. Drawing from a sample of 384 small firms in Northeast China, the analytical results indicate that small business owner managers’ growth intention has a positive effect on firm growth. Furthermore, the empirical findings reveal that entrepreneurial orientation (EO) mediates the link between growth intention and small business growth. Network resources, in terms of political network ties and business network ties further mediate the relationship between entrepreneurial orientation (EO) and small business growth. These research findings contribute to the existing entrepreneurship literature by enhancing and deepening the understanding of the link between growth intention and small business growth, providing a comprehensive picture that depicts a series of key competencies in the growth trajectory of Chinese small businesses.