ABSTRACT. This paper aims to contribute to our under- standing of the factors influencing South Asian entrepreneurial growth in Britain. It develops a multivariate model along the lines of small business economics but includes cultural and social variables. The theoretical model specified assumes that cultural factors have an augmenting effect on socio-economic factors. A distinction is also drawn between initial entrepre- neurial characteristics and later expansion strategies used. The empirical model, based on the general-to-specific approach, can explain almost 60 per cent of entrepreneurial growth. The results suggest that moving away from a style of management based on immigrant culture has a positive impact on growth. This requires greater delegation of responsibilities to non- family employees. At the same time, strengthening links with the country of origin has a positive impact on growth. While the commitment to work hard at start-up is essential, human capital factors like the entrepreneur’s educational attainment and employee training appear to be more crucial than finan- cial resources in contributing to growth. 1. Introduction The contribution of South Asian entrepreneurship to the revival of small businesses in the U.K. is gradually being recognised by policy makers and academics alike. The growth of South Asian entre- preneurship has generally been attributed to cultural factors like hard work, a trading ethic, and the reliance on family labour and ethnic commu- nity networks (see, for example, Ballard, 1994; Metcalf et al., 1996; Ram, 1994 and Werbner, 1990). However, there are some concerns that cultural factors may also limit the growth of South Asian and other ethnic minority businesses and that only those entrepreneurs who have managed to cross these cultural barriers have survived and grown. It is therefore crucial to identify the factors that have enabled some Asian entrepreneurs to expand in the U.K. This paper aims to do so by using multivariate econometric analysis. The main purpose of such an exercise is to evaluate the contribution to growth of various economic, social and cultural factors. In both theoretical and empirical studies of small business, issues such as the entry, survival and growth of firms are analysed. Broadly, there are two streams of literature that are relevant to this paper, one deals with small firms in general and the other focuses specifically on the perfor- mance of ethnic businesses. Both streams of lit- erature have identified a large number of factors that influence the entry, survival and growth of small firms. In the small business economics literature, firm survival and growth are explained in terms of the entrepreneur’s ability to acquire skills through learning-by-doing and to innovate (Jovanovic, 1982; Audretch, 1991). Firm growth is found to be related to firm size and to the age of the firm (Evans, 1987; Phillips and Kirchhoff, 1989). The impact of human capital investment on entrepre- neurial survival and growth has been recognised by economic theory (Casson, 1991; Campbell, 1992) and found to be significant in some empir- ical research (Bates, 1990; Cressy, 1996). The employment potential of small firms has been studied by Hart and Oulton (1996), Storey (1994) and Westhead and Birley (1995). The Hart and Oulton model finds no influence of systematic factors on employment creation and hence attrib- Determinants of South Asian Entrepreneurial Growth in Anuradha Basu Britain: A Multivariate Analysis Arati Goswami Small Business Economics 13: 57–70, 1999.  1999 Kluwer Academic Publishers. Printed in the Netherlands. Final version accepted on March 19, 1999 The University of Reading Department of Economics Whiteknights, P.O. Box 218 Reading RG6 6AA U.K. E-mail: a.basu@reading.ac.uk