Data-driven definitions of gazelle companies that rule out chance: application for Russia and Spain

Ivan Savin and Maria Novitskaya
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Maria Novitskaya: Institute of Economics, of the Ural Branch of the Russian Academy of Sciences

Eurasian Business Review, 2023, vol. 13, issue 3, No 2, 507-542

Abstract: Abstract The phenomenon of fast-growing companies exhibiting sustained growth and creating disproportionally many new jobs, so-called “gazelles”, has been widely analyzed in the literature. The criteria defining “gazelles”, however, lack a consensus, while it cannot be ruled out that superior performance of these companies is just good luck. We use large firm-level datasets for Russia and Spain and conduct a Monte Carlo experiment with first-order Markov chains to derive a definition of “gazelle” companies and ensure that their existence cannot be explained by chance only. Our results demonstrate that the definitions of “gazelle” companies differ between the two countries warning against using same definition for different countries. We find that the “gazelles” account for about 1–2% of the companies in our datasets and are responsible for approximately 14% of employment growth in Russia and 9% in Spain. These companies are concentrated in economic sectors like retail trade, real estate and construction.

Keywords: Fast-growing firm; Markov Chain Monte Carlo; SME; Sustained job creation; Employment (search for similar items in EconPapers)
JEL-codes: C63 D22 J60 L25 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s40821-023-00239-2

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