High-growth firms: Not so vital after all?

Sven-Olov Daunfeldt, Daniel Halvarsson () and Oana Mihaescu ()
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Daniel Halvarsson: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden, http://ratio.se/medarbetare/daniel-halvarsson/

No 263, Ratio Working Papers from The Ratio Institute

Abstract: High-growth firms have received considerable interest recently since they create most of the new jobs in the economy. The purpose of our paper is to investigate the characteristics of high-growth firms prior to their growth period, and whether these characteristics differ across industries. Using data on a large sample of limited liability firms in Sweden for the period 2007-2010, we find that high-growth firms do not have the characteristics that we typically associate with successful firms. On the contrary, our results indicate that high-growth firms have low profits and a weak financial position. This might explain why studies have found that high-growth firms are seldom capable of sustaining their high growth rates in subsequent periods, and thus question policies that are targeted towards these companies.

Keywords: Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Innovation (search for similar items in EconPapers)
JEL-codes: L11 L25 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-12-23
New Economics Papers: this item is included in nep-bec, nep-ent, nep-ind, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: High-growth firms: Not so vital after all? (2015)
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