Scandinavian Working Papers in Economics
HUI Working Papers,
HUI Research
No 136: An international comparison of the contribution to job creation by high growth firms
Michael Anyadike-Danes (), Carl Magnus Bjuggren, Michael Dumont, Sandra Gottschalk, Werner Hözl, Dan Johansson, Mika Maliranta, Anya Myrann, Kristian Nielsen and Guanyu Zheng
Additional contact information
Michael Anyadike-Danes: Aston Business School and Enterprise Research Centre, UK
Carl Magnus Bjuggren: Research Institute of Industrial Economics (IFN), Sweden
Michael Dumont: 3Federal Planning Bureau and Ghent University, Belgium
Sandra Gottschalk: 4ZEW, Germany
Werner Hözl: Austrian Institute of Economic Research (WIFO), Austria
Dan Johansson: HUI Research, Postal: 103 29 Stockholm, Sweden and Örebro University, Sweden
Mika Maliranta: ETLA and University of Jyväskylä, Finland
Anya Myrann: Ragnar Frisch Centre for Economic Research, Norway
Kristian Nielsen: Aalborg University, Denmark, Postal: HUI Research, Regeringsgatan 60, 103 29 Stockholm, Sweden,
Guanyu Zheng: Productivity Commission, New Zealand
Abstract: This paper addresses three simple questions: how should the contribution of HGFs to job creation be measured? how much does this contribution vary across countries? to what extent does the cross-country variation depend on variation in the proportion of HGFs in the business population? The first is a methodological question which we answer using a more highly articulated version of the standard job creation and destruction accounts. The other two are empirical questions which we answer using a purpose-built dataset assembled from national firm-level sources and covering nine countries, spanning the ten three year periods from 2000/03 to 2009/12. The basic principle governing the development of the accounting framework is the choice of appropriate comparators. Firstly, when measuring contributions to job creation, we should focus on just job creating firms, otherwise we are summing over contributions from firms with positive, zero, and negative job creation numbers. Secondly, because we know growth depends in part on size, the ’natural’ comparison for HGFs is with job creation by similar-sized firms which simply did not grow as fast as HGFs. However, we also show how the measurement framework can be further extended to include, for example, a consistent measure of the contribution of small job creating firms. On the empirical side, we find that the HGF share of job creation by large job creating firms varies across countries by a factor of two, from around one third to two thirds. A relatively small proportion of this cross-country variation is accounted for by variations in the influence of HGFs on job creation. On average HGFs generated between three or four times as many jobs as large non-HGF job creating firms, but this ratio is relatively similar across countries. The bulk of the cross-country variation in HGF contribution to job creation is accounted for by the relative abundance (or rarity) of HGFs. Moreover, we also show that the measurement of abundance depends upon the choice of measurement framework: the ’winner’ of a cross-national HGF ’beauty context’ on one measure will not necessarily be the winner on another.
Keywords: high-growth firms; firm growth; job creation
JEL-codes: D22; E24; L11; L25; L26; M13
32 pages, May 12, 2018
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