A Multivariate Analysis of the Characteristics of Rapid Growth Firms, Their Leaders, And Their Market‪.‬

Introduction Firm growth has been associated with wealth creation, job creation and regional development (Acs and Armington, 2006). In addition to that, many entrepreneurs are willing to grow their firms (Davidsson, 1989), and some of them seek rapid growth. Nevertheless, not many CEOs succeed in growing their firm. For example, average GDP growth in Germany, taken as a proxy for average firm growth, was under 1% in the years 2002-2005 (Statistisches Bundesamt, 2006). In the Munich founder study, only one in five firms had grown four years after having started its business operations (Bruderl and Preisendorfer, 2000). Even fewer firms achieve rapid growth, i.e., with growth rates exceeding 20% annually. Autio, Arinius and Wallenius (2000) point out that only 0.2% of a population of single-establishment firms have achieved rapid growth, and Birch reports that only 3% of small firms grow by more than 20% annually and contribute significantly to job generation (Hopkins, 1997). Simon (1992) highlights the fact that not only startups may achieve rapid growth, but also that SMEs in general may be growing rapidly and contributing disproportionately to the value added and the employment created by the German economy. Therefore, it is of interest to analyze the characteristics of rapid growth SMEs (RGFs, rapid growth firms).