Scandinavian Working Papers in Economics

Ratio Working Papers,
The Ratio Institute

No 147: Ownership and High-Growth Firms

Carl Magnus Bjuggren (), Sven-Olov Daunfeldt () and Dan Johansson ()
Additional contact information
Carl Magnus Bjuggren: Ratio, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Sven-Olov Daunfeldt: Ratio, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Dan Johansson: Ratio, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden

Abstract: Empirical studies demonstrate that most net job-growth originates from a small number of high-growth firms (HGFs). The purpose of this paper is to analyze whether firm ownership – family, or private non-family – matters for being a HGF, using data covering all firms in Sweden during 1993-2006. Firm growth is measured in terms of absolute employment growth, relative employment growth and as a combination of absolute and relative employment growth (the so-called Birch-index). We find that family ownership decreases the probability of exhibiting high growth. Changing ownership from family to private non family increases the probability of being a HGF, whereas a change from private non-family to family ownership decreases the probability of being a HGF. The results are robust, irrespective of measurement of firm growth, suggesting that ownership and changes in ownership are important determinants of rapid firm growth.

Keywords: high-growth firms; gazelles; firm growth; firm ownership; family firms; rapid firm growth

JEL-codes: D24; L25; L26

24 pages, First version: February 1, 2010. Revised: September 29, 2010.

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