The paradox of prosperity: Why higher earnings can reduce growth aspirations

Abstract

This study fills a key gap by showing that entrepreneurial growth intentions are not static, but rather shaped by prior success and recent constraints, challenging the assumption that higher income always signals future expansion. Using survey data from Canadian small firms, this study finds that financial and human resource barriers spur growth ambitions, while regulatory and competitive pressures dampen them. This dynamic perspective advances understanding of how past performance and contextual obstacles interact, offering insights for policymakers and lenders to better forecast growth potential and tailor support strategies beyond simple financial indicators.