Empirical analysis of growth factors using Swedish data

Empirical research conducted on economic sectors in the U.S., Germany, Australia and Scotland has shown that factors such as age, size, location, legal form, and industry are related to business growth rates. Much of this research has focused on manufacturing firms thus providing little information about the effect of industrial sector differences upon the factors that are found to be significant. This article uses Swedish data to replicate the previous research while using a different definition of business to enhance the study of effects from industry, international versus domestic businesses, and domestic versus foreign ownership. We seek to confirm that small independent firms demonstrate the greatest growth rates in Sweden as elsewhere and to explore the effects of different industrial sectors on this conclusion. Multiple regression analysis with growth as the dependent variable shows that business age (younger grow more), beginning size (smaller grow more), independence of ownership, type of business activities (indus-trial sectors), and legal form are the most important factors related to growth. Although business growth differs among industrial sectors, across all sectors youth, ownership independence and small size are major factors that underlie growth across all industrial sectors.