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Journal of Economic Integration 2003 December;18(4) :817-836.
The Determinants of Small Firm Growth in the Greek Manufacturing Sector
F. Voulgaris
D. Asteriou and 
G. Agiomirgianakis 
Technological Educational Institute of Crete
City University London
Hellenic Open University, Greece, and City University London
Copyright ©2003 Journal of Economic Integration
The aim of this paper is twofold; first, to identify the variables that mostly affect rapid sales growth in Greek manufacturing small and medium sized enterprises (SMEs); second, to examine the potential influence upon business growth and performance outcomes of those variables representing enterprise and financial management characteristics of the Greek SMEs. The study utilizes panel data of a random sample of 143 firms from the manufacturing SMEs sector in Greece. Regression analysis is used to determine the explanatory factors of rapid sales growth. This paper is firstly addressing the Greek case and our results are in line with the findings of other empirical studies in the European Union (EU), thus, supporting the convergence hypothesis among member states in EU. Indeed, factors found to influence significantly manufacturing SMEs growth in Greece are profitability, liquidity, reliance on long-term debt, employee productivity, fixed assets turnover and restricted sales credit terms. Moreover, our findings also suggest that SMEs located in big cities behave differently from firms located in the periphery with regard to factors related to growth. The same holds true for firms in different industry subgroups. Our findings give rise to several policy implications that are crucial for the competitiveness of the sector, especially in view of the changes induced by the European Monetary Union, as well as, by other undergoing economic changes in the country such as the Olympic Games 2004. Policies such as low cost financing, lower tax burdens, incentives for investments in new technology, continuous personnel training, promotion of e-commerce and cooperation with foreign firms might induce fast growth in Greek SMEs. · JEL Classifications: G32, L6, L11, C23
Keywords: Capital structure | Industry study | Manufacturing | Panel data
1. Acs, Z. and D. Audretsch (1990), "The Determinants of Small-Firm Growth in U.S. Manufacturing", Applied Economics, 22, 143-153.
2. Almus, M. and E.A. Nerlinger (1999), "Growth of New Technology Based Firms:
3. Which Factors Matter?", Small Business Economics, 13, 141-154.
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