Scandinavian Working Papers in Economics

HFI Working Papers,
Institute of Retail Economics (Handelns Forskningsinstitut)

No 2: High-growth firms and the labor market entry of first generation immigrants

Sven-Olov Daunfeldt () and Hans Westerberg ()
Additional contact information
Sven-Olov Daunfeldt: Institute of Retail Economics (Handelns Forskningsinstitut), Postal: Regeringsgatan 60, 103 29 Stockholm, Sweden and Dalarna University, Falun, Sweden
Hans Westerberg: Institute of Retail Economics (Handelns Forskningsinstitut), Postal: Regeringsgatan 60, 103 29 Stockholm, Sweden and Örebro University, Örebro, Sweden

Abstract: The number of refugees in Europe has increased dramatically in recent years, and many countries are facing great challenges to integrating these refugees into their societies. A small group of high-growth firms have at the same time attracted attention because they create the most new jobs at any given point in time. Using matched employer-employee data from Statistics Sweden, we find that these high-growth firms in general are more likely to recruit first-generation immigrants that are unemployed. This provides support for the hypothesis that managers in high-growth firms, to greater extents, recruit marginalized individuals because they want to take advantage of their growth opportunities and therefore do not wait for the best match. Rapidly growing firms are thus less selective in their hiring decisions, and policies that are focused on increasing the number of high-growth firms might also help immigrants who face difficulties entering the labor market.

Keywords: Firm growth; Gazelles; High-growth firms; Immigration; Integration; Labor market; Matching models; Resource based theory; Interaction effects; Logit; Odds ratio

JEL-codes: D22; J15; L25; L26

24 pages, August 30, 2019

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