Growth and economies of scale among timber haulage companies

Abstract

Purpose

The purpose of this study is to help growth‐oriented timber haulage entrepreneurs to recognise the problems of growth and understand its implications.

Design/methodology/approach

Data from 30 companies were retrieved from their financial statements between 2001 and 2006. The relevant literature consists of the company growth theory, strategy analysis and definitions of entrepreneurship. In this empirical study a resource‐based approach was used as the theoretical background. The research method was purely financial analysis.

Findings

Economies of scale exist in the sector but are limited and do not evolve hand‐in‐hand with company size. There is an optimum size for a timber haulage company at which it can operate efficiently. However, the sector may be polarised.

Research limitations/implications

The data used in the study do not clarify the particular entrepreneurial actions taken in companies as they grew.

Originality/value

This empirical study covers new ground and offers new information about the sector. The results can be used to assist in the development of the sector, which has been studied very little. In addition, the results can be used as a background for further studies, and also by growth‐oriented companies' management when considering the option of growth.

Citation

Soirinsuo, J. and Mäkinen, P. (2011), "Growth and economies of scale among timber haulage companies", Journal of Small Business and Enterprise Development, Vol. 18 No. 1, pp. 170-184. https://doi.org/10.1108/14626001111106497