HUI Working Papers, HUI Research
A cautionary note on using the Eurostat-OECD definition of high-growth firms
(), Daniel Halvarsson and Dan Johansson
Abstract: Recent studies have suggested that most firms do not grow,
and that a small number of high-growth firms create most new jobs.
High-growth firms have therefore attracted an increasing amount of
attention from researchers and policymakers. However, there is no uniform
definition of what constitutes a high-growth firm in the literature.
Eurostat and the Organisation for Economic Co-operation and Development
(OECD) recently recommended that high-growth firms should be defined as
firms with at least ten employees in the start-year and annualized
employment (or sales) growth exceeding 20% during a 3-year period. This
definition would exclude almost 95% of surviving firms in Sweden and about
40% of new private jobs during 2005-2008. We therefore advise caution in
using this definition.
Keywords: High-growth firms; high-impact firms; gazelles; OECD definition; (follow links to similar papers)
JEL-Codes: L22; L25; L26; (follow links to similar papers)
10 pages, April 19, 2012
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