Are high-growth firms overrepresented in high-tech industries?

Sven-Olov Daunfeldt, Niklas Elert () and Dan Johansson

Industrial and Corporate Change, 2016, vol. 25, issue 1, 1-21

Abstract: It is frequently argued that policymakers should target high-tech firms, i.e., firms with high R&D intensity, because such firms are considered more innovative and therefore potential fast-growers. This argument relies on the assumption that the association among high-tech status, innovativeness, and growth is actually positive. We examine this assumption by studying the industry distribution of high-growth firms (HGFs) across all four-digit NACE industries, using data covering all limited liability firms in Sweden during the period 1997–2008. The results of fractional logit regressions indicate that industries with high R&D intensity, ceteris paribus, can be expected to have a lower share of HGFs than can industries with lower R&D intensity. The findings cast doubt on the wisdom of targeting R&D industries or subsidizing R&D to promote firm growth. In contrast, we find that HGFs are overrepresented in knowledge-intensive service industries, i.e., service industries with a high share of human capital.

Date: 2016
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Related works:
Working Paper: Are High-Growth Firms Overrepresented in High-Tech Industries? (2015)
Working Paper: Are High-Growth Firms Overrepresented in High-tech Industries? (2014)
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