Measuring the persistence of high firm growth: choices and consequences

Eva Erhardt

Small Business Economics, 2021, vol. 56, issue 1, No 21, 478 pages

Abstract: Abstract Does high growth persist? This study shows how the answer to this question depends on the measurement of growth. It systematically compares the consequences of different choices (absolute, relative, and composite growth formulas) on three notions of persistence: repetition of high growth, future growth of surviving high-growth firms, and overall future growth of both survivors and exits. The empirical analysis is based on administrative data from Amadeus on Bulgarian firms for 3-year periods of growth between 2001 and 2010. The focus is on total growth in employees. Our findings demonstrate how results largely vary between growth measures. Moreover, we detect empirical regularity related to growth measures in previous evidence. Most importantly, if persistence is understood as overall future growth including both the contributions by surviving and exiting firms, then high growth does not persist.

Keywords: High-growth firms; Persistence; Growth measures; Firm size; Firm exit; C18; D21; D22; L11; L26 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:sbusec:v:56:y:2021:i:1:d:10.1007_s11187-019-00229-7

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DOI: 10.1007/s11187-019-00229-7

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