Scandinavian Working Papers in Economics
Ratio Working Papers,
The Ratio Institute
No 263: High-growth firms: Not so vital after all?
Sven-Olov Daunfeldt (), Daniel Halvarsson () and Oana Mihaescu ()
Additional contact information
Sven-Olov Daunfeldt: HUI Research and Dalarna University, Postal: HUI Research, 103 29 Stockholm, Sweden and, Department of Economics, Dalarna University, 781 88 Borlänge,, Sweden
Daniel Halvarsson: The Ratio Institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden
Oana Mihaescu: HUI Research and Dalarna University, Postal: HUI Research, 103 29 Stockholm, Sweden and, Department of Economics, Dalarna University, 781 88 Borlänge,, Sweden
Abstract: High-growth firms have received considerable interest recently since they create most of the new jobs in the economy. The purpose of our paper is to investigate the characteristics of high-growth firms prior to their growth period, and whether these characteristics differ across industries. Using data on a large sample of limited liability firms in Sweden for the period 2007-2010, we find that high-growth firms do not have the characteristics that we typically associate with successful firms. On the contrary, our results indicate that high-growth firms have low profits and a weak financial position. This might explain why studies have found that high-growth firms are seldom capable of sustaining their high growth rates in subsequent periods, and thus question policies that are targeted towards these companies.
Keywords: Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Innovation
30 pages, December 23, 2015
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sod_dh_om_hgf_not_so_vital_after_all_263.pdf
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