Are High-Growth Firms Overrepresented in High-Tech Industries?

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

No 1062, Working Paper Series from Research Institute of Industrial Economics

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 4-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.

Keywords: Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Innovation; R&D (search for similar items in EconPapers)
JEL-codes: L11 L25 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2015-03-25
New Economics Papers: this item is included in nep-cse, nep-ent, nep-eur, nep-ind, nep-ino, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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Related works:
Journal Article: Are high-growth firms overrepresented in high-tech industries? (2016)
Working Paper: Are High-Growth Firms Overrepresented in High-tech Industries? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:1062

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