Scale Barriers and Growth Opportunities: A Resource-Based Model of New Venture Expansion

Shelton, Lois M. (2005) Scale Barriers and Growth Opportunities: A Resource-based Model of New Venture Expansion, Journal of Enterprising Culture, 13(4), 333-357.

26 Pages Posted: 21 Jun 2013

See all articles by Lois M. Shelton

Lois M. Shelton

California State University, Northridge

Date Written: June 20, 2005

Abstract

The concept of scale barriers is introduced to shed light on new venture growth. Growth is a process of overcoming resource deficiencies, or scale barriers, resulting from the liabilities of newness and smallness. New ventures employ a variety of resource accumulation strategies to surmount three types of barriers - competitive deficiencies, management and operational deficiencies, and financial deficiencies. A theoretical model shows how environmental munificence and industry conditions influence barrier size while resource accumulation strategies and initial venture endowments determine a venture's ability to overcome these barriers. The difficulties of growth are illustrated as an extension of the difficulties of survival.

Keywords: new venture growth, firm expansion, scale barriers

JEL Classification: D21, L21, M13

Suggested Citation

Shelton, Lois M., Scale Barriers and Growth Opportunities: A Resource-Based Model of New Venture Expansion (June 20, 2005). Shelton, Lois M. (2005) Scale Barriers and Growth Opportunities: A Resource-based Model of New Venture Expansion, Journal of Enterprising Culture, 13(4), 333-357., Available at SSRN: https://ssrn.com/abstract=2282415

Lois M. Shelton (Contact Author)

California State University, Northridge ( email )

Department of Management
18111 Nordhoff Street
Northridge, CA 91330-8376
United States
818-677-3313 (Phone)

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