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Analyzing a list of all Small Business Administration (SBA) loans in 1991 to 2009 linked with annual information on all U.S. employers from 1976 to 2012, we apply detailed matching and regression methods to estimate the variation in SBA loan effects on job creation and firm survival across firm age and size groups. The number of jobs created per million dollars of loans generally increases with size and decreases in age. The results imply that fast-growing firms (“gazelles”) experience the greatest financial constraints to growth, while the growth of small, mature firms is least financially constrained. The estimated association between survival and loan amount is larger for younger and smaller firms facing the “valley of death”.
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Centers of gravity: The effect of stable shared leadership in top management teams on firm growth and industry evolution
Abstract Research SummaryWe study the processes of firm growth in the evolution of the Japanese cotton spinning industry during 1883–1914 by integrating strategy and historical approaches and utilizing rich quantitative firm‐level data and detailed business histories. The resultant conceptual model highlights growth outcomes of path dependencies as firms evolve across periods of single versus shared leadership, establish stability in shared leadership, or experience repeated discord‐induced top management team (TMT) leader departures. While most firms do not experience smooth transitions to stable shared TMT leadership, a focus on value creation, in conjunction with talent recruitment and promotion, enabled some firms to achieve stable shared leadership despite discord‐induced departures, engage in long‐term expansion, and emerge as “centers of gravity” for output and talent in the industry. Managerial SummaryWe demonstrate stable shared leadership is at root of firms who emerge as centers of gravity in an industry and account for the lion's share of output. Stable shared leadership enables growth strategies such as talent recruitment, product diversification, downstream integration, and acquisitions. Stable shared leadership, however, is extremely difficult to maintain. Most firms experience discord‐induced departures in TMTs due to politics and power struggles. Firms that deviate from this norm to become industry leaders achieve stable shared leadership by adhering to fundamental principles related to long‐term value creation as opposed to short‐term gain, adoption of merit‐based promotion systems in defiance of stereotypes, sharing of power within TMT leadership to enable efficient division of labor, and honorable resolution of conflicts and ethical breaches.
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- Award ID(s):
- 1632833
- PAR ID:
- 10372065
- Publisher / Repository:
- Wiley Blackwell (John Wiley & Sons)
- Date Published:
- Journal Name:
- Strategic Management Journal
- Volume:
- 41
- Issue:
- 3
- ISSN:
- 0143-2095
- Format(s):
- Medium: X Size: p. 467-498
- Size(s):
- p. 467-498
- Sponsoring Org:
- National Science Foundation
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