EIB Working Paper 2021/08 - Do capacity constraints trigger high growth for enterprises?
High-Growth Enterprises have a large economic impact, but it is notoriously hard to predict when firms will experience episodes of high growth. This paper proposes that firms reaching critically high capacity utilisation levels reach a ‘trigger point’ involving either broad-based investment in furth...
Gespeichert in:
| 1. Verfasser: | |
|---|---|
| Format: | Online |
| Sprache: | Englisch |
| Veröffentlicht: |
European Investment Bank
2021
|
| Schlagworte: | |
| Online-Zugang: | OCN: 1289790193 |
| Tags: |
Keine Tags, Fügen Sie das erste Tag hinzu!
|
| _version_ | 1869528931690872832 |
|---|---|
| author | European Investment Bank |
| author_browse | European Investment Bank |
| author_facet | European Investment Bank |
| author_sort | European Investment Bank |
| collection | Directory of Open Access Books |
| description | High-Growth Enterprises have a large economic impact, but it is notoriously hard to predict when firms will experience episodes of high growth. This paper proposes that firms reaching critically high capacity utilisation levels reach a ‘trigger point’ involving either broad-based investment in further growth, or shrinking back to previous levels. It analyses EIBIS survey data (matched to the ORBIS database) which features a question on time-varying capacity utilisation. Overcapacity is a transitory state. Firms enter into overcapacity after a period of rapid growth of sales and profits, and the years surrounding overcapacity have higher employment growth rates. Firms operating at overcapacity make incremental investments (e.g. capacity expansion, process improvements, and modern machinery) rather than investing in R&D and new product development. The analysis finds support for the ‘fork in the road’ hypothesis: for some firms, overcapacity is associated with launching into massive investments and subsequent sales growth, while for other firms, overcapacity is negatively related to both investments and sales growth. |
| format | Online |
| id | doab-20.500.12854ir-72854 |
| institution | Directory of Open Access Books |
| language | eng |
| publishDate | 2021 |
| publishDateRange | 2021 |
| publishDateSort | 2021 |
| publisher | European Investment Bank |
| publisherStr | European Investment Bank |
| record_format | ojs |
| spelling | doab-20.500.12854ir-728542025-07-30T17:44:30Z EIB Working Paper 2021/08 - Do capacity constraints trigger high growth for enterprises? European Investment Bank Business & Economics Free Enterprise & Capitalism thema EDItEUR::K Economics, Finance, Business and Management::KC Economics High-Growth Enterprises have a large economic impact, but it is notoriously hard to predict when firms will experience episodes of high growth. This paper proposes that firms reaching critically high capacity utilisation levels reach a ‘trigger point’ involving either broad-based investment in further growth, or shrinking back to previous levels. It analyses EIBIS survey data (matched to the ORBIS database) which features a question on time-varying capacity utilisation. Overcapacity is a transitory state. Firms enter into overcapacity after a period of rapid growth of sales and profits, and the years surrounding overcapacity have higher employment growth rates. Firms operating at overcapacity make incremental investments (e.g. capacity expansion, process improvements, and modern machinery) rather than investing in R&D and new product development. The analysis finds support for the ‘fork in the road’ hypothesis: for some firms, overcapacity is associated with launching into massive investments and subsequent sales growth, while for other firms, overcapacity is negatively related to both investments and sales growth. 2021-11-17T04:02:42Z 2021-11-17T04:02:42Z 2021-11-16T05:30:58Z 2021 book OCN: 1289790193 https://library.oapen.org/handle/20.500.12657/51522 9789286150500 https://directory.doabooks.org/handle/20.500.12854/72854 eng open access image/jpeg image/jpeg Attribution-NonCommercial-NoDerivatives 4.0 International Attribution-NonCommercial-NoDerivatives 4.0 International https://library.oapen.org/bitstream/20.500.12657/51522/5/do%20capacity%20constraints%20trigger%20high%20growth%20for%20enterprises_-QHBK21008ENN.pdf https://library.oapen.org/bitstream/20.500.12657/51522/5/do%20capacity%20constraints%20trigger%20high%20growth%20for%20enterprises_-QHBK21008ENN.pdf European Investment Bank European Investment Bank https://doi.org/10.2867/20387 https://doi.org/10.2867/20387 feca012f-a3d8-4aac-95aa-b6cf4bdbed7c Knowledge Unlatched 9789286150500 Knowledge Unlatched (KU) KU Open Services European Investment Bank open access |
| spellingShingle | Business & Economics Free Enterprise & Capitalism thema EDItEUR::K Economics, Finance, Business and Management::KC Economics European Investment Bank EIB Working Paper 2021/08 - Do capacity constraints trigger high growth for enterprises? |
| title | EIB Working Paper 2021/08 - Do capacity constraints trigger high growth for enterprises? |
| title_full | EIB Working Paper 2021/08 - Do capacity constraints trigger high growth for enterprises? |
| title_fullStr | EIB Working Paper 2021/08 - Do capacity constraints trigger high growth for enterprises? |
| title_full_unstemmed | EIB Working Paper 2021/08 - Do capacity constraints trigger high growth for enterprises? |
| title_short | EIB Working Paper 2021/08 - Do capacity constraints trigger high growth for enterprises? |
| title_sort | eib working paper 2021 08 do capacity constraints trigger high growth for enterprises |
| topic | Business & Economics Free Enterprise & Capitalism thema EDItEUR::K Economics, Finance, Business and Management::KC Economics |
| topic_facet | Business & Economics Free Enterprise & Capitalism thema EDItEUR::K Economics, Finance, Business and Management::KC Economics |
| url | OCN: 1289790193 |
| work_keys_str_mv | AT europeaninvestmentbank eibworkingpaper202108docapacityconstraintstriggerhighgrowthforenterprises |