Knowledge-based factors and growth of new hospitality firms: a study of Iberian, Nordic, and Baltic entrepreneurs

Abstract

Firm growth is one of the goals of many entrepreneurs in the tourism sector, and its study is in line with Sustainable Development Goal 9. This SDG refers to decent work and economic growth. Firm growth is associated with a positive performance and a sign of the potential long-term survival of the firm. Though many factors can influence the growth of new firms in the tourism industry, knowledge-based factors are particularly emphasised in the academic literature as strong drivers of several dimensions of organisational performance. The field of knowledge management outlines several knowledge-based factors that are strategically relevant for new firms. The goal of this work is to identify knowledge-based aspects that influence the growth of new firms. To that end, we test six hypotheses related to factors identified as significant for firm growth, namely the entrepreneurs’ formal education, their knowledge to start a business, their entrepreneurial network knowledge, and their knowledge to identify opportunities, along with their firms’ product and technological knowledge creation. The analysis is based on data extracted from the databases of the Global Entrepreneurship Monitor (GEM) for 2015 and 2016. In total, 228 new entrepreneurs with new lodging and food and beverage firms younger than 42 months from Spain, Portugal and Nordic and Baltic countries comprise the final sample. A regression analysis was performed to test the hypotheses of this work. Results show the positive impact of the entrepreneur’s higher education and the introduction of process innovation as determinants of the expected growth in those firms.