Impact of global economic crisis on firm growth

The global economic crisis has had an adverse effect on, and may continue to affect, the entrepreneurial sector all over the world. However, even in a recessionary period, there will always be some firms growing faster than others. It is therefore imperative to understand the variables and processes that make some firms grow faster or more resilient to crisis than others. In this paper, we focus on firm size and its contributions to growth. We examine whether growth rates of manufacturing and service industries are independent of firm size during the period of economic crisis. Based on a large sample of surviving firms in the manufacturing and hospitality industries, the results of two-step dynamic panel suggest that turnover growth is positively associated with companies’ size during the observed period of economic recession 2008–2013. In both industries, large and medium-sized firms exhibit higher growth than do small firms.