Working Paper Series
Sven-Olof Daunfeldt, Niklas Elert
Are High-Growth Firms Overrepresented in High-Tech Industries?
() and Dan Johansson
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; (follow links to similar papers)
JEL-Codes: L11; L25; (follow links to similar papers)
38 pages, March 25, 2015
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