High-Growth in Private Firms: the Role of Family Control and Slack Resources

High-growth firms make a disproportionate contribution to the creation of employment, wealth and general economic development. Although high-growth is a non-negligible and relevant entrepreneurial phenomenon in many countries, knowledge about the antecedents of such high-growth patterns is limited and findings about private firms are inconclusive. In this paper, we analyse the direct effect of family control and the moderation effect of slack resources on high-growth patterns of private firms. We develop arguments based on the behavioural agency model and growth logics to predict the likelihood of high-growth in private firms. In particular, we claim that family control reduces the likelihood of high-growth, while high- and low-discretion slack resources moderate this relationship in a negative and positive way respectively. We test our hypotheses on a sample of 42,278 privately held European firms and the results fully support our arguments. Our paper contributes to the understanding of high-growth in general, and of private family firms’ high-growth in particular, and concludes with a discussion of future research developments in these fields.