The risk of growing fast

Jan de Kok, Haibo Zhou and Chantal Hartog

No H201119, Scales Research Reports from EIM Business and Policy Research

Abstract: Are firm growth and firm survival related to each other? This paper tests the hypothesis that the relationship between firm growth and firm survival can be characterised by an inverted U-shaped relation. This hypothesis is confirmed by our estimations. At the same time, the results indicate that the top of the inverted U-shaped relation occurs at very high growth rates. This suggests that for the large majority of enterprises, the relationship between firm growth and firm survival can be better described by a positive relationship rather than an inverted U-shaped relationship. Although these results are preliminary, they suggest that policies that aim to increase the number of fast-growing firms have no negative effects on the rate of firm deaths.

Pages: 36 pages
Date: 2012-02-02
New Economics Papers: this item is included in nep-bec, nep-ent and nep-sbm
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eim:papers:h201119

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