Document Type

Working Paper

Date of this Version



How does allocation of limited employee resources affect firms’ growth, and how does fast growth force or enable certain employee allocation structures?

We show a clear but weak negative correlation between employee count and firm growth. That is, firms with fewer employees grow faster than those with more employees, as a whole. However, we have not yet been able to draw more detailed conclusions about firm structure or about the use of revenue due to a number of confounding factors. We explain these confounding factors and suggest a number of possible explanations for the apparent relationship between employees and growth. Finally, we address next steps for resolving the confounding factors and describe the implications of our results.

Included in

Business Commons



Date Posted: 28 October 2014


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