The role of alliances in the early development of high-growth firms

Rapid growth is sought after but may overstretch a firm’s resources. Can alliances supply compensating support for rapidly growing firms? Longitudinal data on firms in a technology cluster are used to investigate rapid growth in relation to alliances and other factors known to be associated with firm growth. Rapid firm growth appears beneficial in terms of higher survival rates and earlier attainment of mid-size, but is rarely sustained. Alliances are predictors of rapid growth, as are international operations. Venture capital is not directly associated with firm growth in the findings, but there is a high incidence of alliances among venture capital-backed firms.