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Publications (190)
Stages of growth models are important for understanding scale-ups. One of the differences between scale-ups and HGFs is that research on HGFs does not take growth stages into account, as long as growth is fast enough. This chapter presents Steve Blank’s 4-stage model of firm growth, where scaling up is stage 3. Hence, scaling-up does not occur dire...
This chapter takes our empirical definition of scale-up to the data: Swedish register data on over 700,000 firms for the period 1997–2001. 1.28% of firms meet the HGF criteria. Among these HGFs, it is rare for a firm to satisfy all 7 scale-up conditions (in line with the idea of ‘too many exceptions’). 25.89% of HGFs satisfy 5 or more of the 7 cond...
This chapter draws on the literature to develop our theoretical definition of a scale-up. A critical discussion of previous literature helps distinguish between aspects that are essential or unnecessary for a definition of a scale-up. We then put forward the following five suggestions for a theoretical definition of a scale-up: (1) Scale-ups are in...
This chapter discusses previous research into firm growth. In particular, Eurostat and the OECD proposed an indicator of High-Growth Firms in 2007 that has helped develop the field of HGF research, because having a standardized HGF definition fostered comparisons of research findings and cumulativeness of knowledge.
The book begins with an introduction to research on High-Growth Firms and scale-ups, focusing on the development of the literature, and observing that early work on scale-ups focused on anecdotal evidence and case studies. In contrast, this book seeks to develop a rigorous and general definition of scale-ups that is amenable to being applied to dat...
This chapter pushes further in our investigation of the nature of scale-ups by introducing the following eight propositions about scale-ups: (1) a scale up is a concept born of practitioners, not academics; (2) scale-ups are not just in the IT sector, but may be enabled by IT; (3) a scale-up is a qualitative concept from a ‘stages-of-growth’ model;...
This book distinguishes between a theoretical definition and an empirical definition. The theoretical definition seeks to clarify the concept of a scale-up in the minds of readers, using familiar theoretical concepts (such as marginal cost) that may be prohibitively difficult to measure in standard datasets, because the theoretical ideas do not map...
Previous work has found that a small number of export superstars contribute disproportionally to the economy’s overall exports. Differently from export superstars, this study is the first to define high growth exporters (HGXs) (that are not export superstars) as a new firm category. We provide their economic importance and depict their micro-level...
Policy-makers and scholars often assume that a higher incidence of high-growth firms (HGFs) is synonymous with vibrant regional economic dynamics, and that HGF shares are persistent over time as Entrepreneurial Ecosystems (EEs) have slowly-changing features. In this paper we test these hypotheses, which are deeply rooted in the EE literature. We dr...
We discuss that entry can be considered from various levels of analysis: entrepreneur-level, firm-level, and also at higher levels of aggregation, such as the industry-level and country-level. We also formulate a list of six challenges for econometric studies of firm entry, highlighting the data sources, typical empirical setups, potential sources...
Purpose
The authors explore how did the COVID shock hit European firms at the upper quantiles (high-growth superstars) and the lower quantiles (rapidly declining firms).
Design/methodology/approach
The authors analyze the European Investment Bank Investment Survey (2016–2020). This exploratory paper applies graphical techniques and quantile regres...
Export boosting is a policy agenda in developed and developing countries. Previous work has found that a small number of Superstars contribute disproportionally to the economy's overall exports. Differently from Superstars, this study is the first to define high growth exporters (HGXs), provide their economic importance and depict their micro-level...
The effect of the COVID shock on European economies has been severe and also unequal, with some firms being affected much more strongly than others. To improve the effectiveness of policy interventions, policymakers need to understand which types of vulnerable firms have been suddenly pushed into dire circumstances. We seek to fill this important g...
We investigate the corpus of literature on firm exit by means of a systematic literature review (SLR) which yields a final sample of 142 journal articles for the period 1991–2020. The phenomenon of firm exit is explored from a variety of perspectives: business exit; exit at the individual entrepreneur level; exit from specific markets; exit from fo...
Plain English Summary
In the race to the South Pole, Roald Amundsen and Robert Falcon Scott adopted different strategies that resulted in victory for Amundsen and death for Scott. Amundsen’s approach was to consistently pace his team (to cover a fixed and equal distance each day), while Scott sought to cover as much distance as possible each day. I...
This paper explores the relationship between new digital technologies, internationalisation activity and its impact on High Growth Enterprises (HGEs), using the EIB Group Survey of Investment and Investment Finance and ORBIS data for 27 EU Member States and the United Kingdom. After controlling for sample selection bias, our results suggest that be...
We map the distribution of High-Growth Firms (HGFs, or “gazelles”) across the dimensions of firm size and firm age using contour plots, where firm size and growth are measured in terms of employees. The analysis is based on Swedish total population data for the period 1990–2016, covering approximately 11, 000, 000 firm-year observations. The result...
High-Growth Enterprises (HGEs) have received growing interest from entrepreneurship scholars, the business press, and of course policymakers. HGEs can potentially make large contributions to economic growth, which has led to various policy initiatives. This chapter discusses the main topics surrounding policy interventions for HGEs, including a dis...
We investigate the impact of "routinization" on the labor outcomes of displaced workers. We use a rich Brazilian panel dataset and an occupation-task mapping to examine the effect of job displacement in different groups, classified according to their tasks. Our main result is that following a layoff, workers previously employed in routine-intensive...
Plain English Summary
The winner of the 2020 Global Award for Entrepreneurship Research, John Haltiwanger, has pioneered research showing that it is mainly firm age, not size, that matters for job creation. Through analyzing the relationship between employment, growth, and firms, he has advanced our understanding of how the economy works. He has do...
Most studies analysing the relationship between R&D and firm growth focus on total R&D investment. This paper aims to analyse separately each component of R&D investment (basic research, applied research and technological development) and evaluate how these types of R&D investment are related to firm growth. Using a sample of 3972 Spanish manufactu...
We compare individuals presently employed either at a university, or at a firm from an R&D-intensive sector, and analyze which of their personal-specific and employer-specific characteristics are related to their choice to leave their present employer for an own startup. Our data set combines the population of Danish employees with their present em...
High-growth enterprises (HGEs) have a large economic impact but are notoriously hard to predict. Previous research has linked high-growth episodes to the configuration of lumpy indivisible resources inside firms, such that high capacity utilisation levels might stimulate future growth. We theorize that firms reaching critically high capacity utilis...
Research has recently emphasized that the non-survival of entrepreneurial firms can be disaggregated into distinct exit routes such as merger and acquisition (M&A), voluntary closure, and failure. Firm performance is an alleged determinant of exit route. However, there is a lack of evidence linking exit routes to their previous growth performance....
This article discusses recent results and future research possibilities in the areas of econometrics and firm growth, drawing on Dosi and Marengo’s “10 building blocks” of evolutionary theory. These 10 building blocks are: dynamics first!, microfoundations, realism is a virtue, bounded rationality, persistent heterogeneity, novelty in the system, s...
This ‘Debate Essay’ responds to the extensive overview of research on new venture survival provided by Soto‐Simeone et al. (‘New venture survival: A review and extension’, International Journal of Management Reviews, 22(4), 2020, pp. 378–407). The material they reviewed exclusively emphasized the link between the talents, skills, awareness of the b...
Industrial innovation churns out increasingly unnatural products and technologies amid scientific uncertainty about their harmful effects. We argue that a quick regulatory response to the discovery that certain innovations are harmful is an important indicator for evaluating the performance of an innovation system. Using a unique hand-collected dat...
What is the economic contribution of a cohort of new entrants? Previous research has investigated this topic but only in passing, and found conflicting results. We analyze a cohort of 6578 firms that entered in 2004, and track them for 10 years with an emphasis on size, which is measured using (deflated) sales data from the entrepreneurs’ bank acco...
We investigate whether our limited ability to predict high-growth firms (HGF) is because previous research has used a restricted set of explanatory variables, and in particular because there is a need for explanatory variables with high variation within firms over time. To this end, we apply “big data” techniques (i.e., LASSO; Least Absolute Shrink...
Private sector R&D is largely concentrated in a few multinational companies (MNCs). The mobility of labor between these MNCs and the rest of the economy is therefore an important mechanism for the diffusion of knowledge and technology, but these flows are not without friction. This paper analyses in great detail the flow of labor between firms with...
We provide a broad discussion of the dark side of innovation, before introducing the papers of the special issue. We start with a critical reply to optimists, complementing the list of indicators showing steady human progress with a list of indicators that show sustained deterioration (largely due to innovation). We then outline some relevant dimen...
We investigate the effects of R&D investment on performance outcomes (sales growth and relative profitability) for Indian manufacturing firms. Previous research shows contradictory results—while some studies find a positive effect of R&D on firm performance, some find that firms investing in R&D do not perform significantly better, in some cases, e...
Do moderate-growth new firms have higher survival rates than fast-growing new firms? To address this question the customer bank records of 6578 new ventures are tracked over their first 10 years, and survival is measured either in terms of continued use of the bank account, or by entry into financial default. Simple bar charts show that it is the 7...
Industrial innovation churns out increasingly unnatural products and technologies amid scientific uncertainty about their harmful effects. We argue that a quick regulatory response to the discovery that certain innovations are harmful is an important indicator for evaluating the performance of an innovation system. Using a unique hand-collected dat...
This paper introduces a little known category of estimators-Linear Non-Gaussian vector autoregression models that are acyclic or cyclic-imported from the machine learning literature, to revisit a well-known debate. Does exporting increase firm productivity? Or is it only more productive firms that remain in the export market? We focus on a relative...
After decades of impressive growth, the new member states of the European Union are once again in transition, but this time from imitation to innovation-driven competitiveness. This paper evaluates the relationship between both public funding and public procurement for innovation (PPI) and firm-level innovation output and outcome additionality, in...
This article theorizes how short-term revenue volatility affects new venture viability and how such volatility develops over time. Tracking the bank accounts of 6,578 new ventures over a 10-year period, we find that, even after controlling for a range of other factors, short-term revenue volatility is a strong predictor of venture exit. Although sh...
This special issue contains a set of papers that examine the interactions between innovation policy, innovation, and firm competitiveness and performance. Using mostly micro and mostly European data, these studies advance our understanding of these interactions, which can be rather complex and depend to some extent on the institutional and regulato...
Many industrialized countries in Europe and North America have experienced a steady decline in the manufacturing sector over the last few decades. Amid growing concerns that outsourcing and offshoring have destabilized European economies, policymakers have suggested that a large manufacturing sector can: i)boost R&D, ii)encourage exporting, and iii...
We investigate whether our limited ability to predict high-growth firms (HGF) is because previous research has used a restricted set of explanatory variables, and in particular because there is a need for explanatory variables with high variation within firms over time. To this end, we apply “big data” techniques (i.e., LASSO; Least Absolute Shrink...
This paper presents a new statistical toolkit by applying three techniques for data-driven causal inference from the machine learning community that are little-known among economists and innovation scholars: a conditional independencebased approach, additive noise models, and non-algorithmic inference by hand. We include three applications to CIS d...
This exploratory research note investigates the frequency and activity of HighGrowth Firms (HGFs) in Peru using panel data on Peru's largest firms for the years 2001-2016. Firms in our dataset enjoyed strong growth in revenues during the period. Compared to other countries, HGFs are relatively common in Peru although the share they represent of all...
This article tries to uncover the drivers of soccer players’ market value in the five major European soccer leagues taking into account model uncertainty (variable selection) in a framework with 35 billion potential models. For this purpose, we use a hedonic regression framework and implement Bayesian model averaging (BMA) through Markov chain Mont...
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Special Issue in Small Business Economics Journal.
DEADLINE: Manuscripts must be submitted by Sunday January 20, 2019, to sbej.si.exit@gmail.com
Do firms in the same sector converge towards the same R&D intensities? Previous research has often assumed this to be true. A closer examination, using microdata from the EU Industrial R&D Investment Scoreboard for the years 2000–2015, shows considerable heterogeneity in R&D intensities among firms in the same sector, and that this heterogeneity pe...
Understanding causal relationships among key economic variables is crucial for policy makers, who wish to e.g. stimulate private R&D growth. To this end, we applied a technique recently imported from the Machine Learning community (Structural Vector Autoregressions (SVARs) identified using Independent Components Analysis (ICA)) to a data-set of the...
Strategies for firm growth vary in terms of their degrees of novelty, uncertainty and synergy. Modes of firm growth include replication (growth by ‘more of the same’), 10.1057/978-1-137-00772-8_409 and internationalization. Growth strategies can be implemented using 10.1057/978-1-137-00772-8_696 or through 10.1057/978-1-137-00772-8_383. Desire to g...
In this short article we make the case for the need of defining long-term scientific and industrial research objectives as part of an integrated EU industrial & innovation agenda. This should be organized around few objectives coupled with targeted industrial (technology) policies in a coherent strategic framework where countries and regions can ch...
Amid increasing interest in firm age and its effects on firm performance, this special issue offers an exhaustive review of the literature and a novel collection of evidence on the effects of firm age on performance, including a special focus of interest on innovation performance, financial performance, exports, survival and growth. This editorial...
This survey paper synthesizes theory and evidence on processes of firm-level aging. We discuss why anthropomorphic analogies are not helpful for understanding firm aging, because of differences in population pyramid shapes (with around 50 % of firms exiting after just 3 years), no upper bound on firm ages, and no deterministic change in performance...
Is firm growth more persistent for young or old firms? Theory gives us no clear guidance, and previous empirical investigations have been hampered by a lack of detailed data on firm age, as well as a non-representative coverage of young firms. We overcome these shortcomings using a rich dataset on all limited liability firms in Sweden during 1998–2...
Although diversity between team members may bring benefits of new perspectives, nevertheless, what holds a team together is some degree of similarity. We theorise that diversity in one dimension is traded off against diversity in another. Our analysis of collaborative research teams that received FP7 funding presents robust results that indicators...
Recent empirical studies have investigated the territorial impact of Europe’s research policies, in particular the contribution of the European Framework Programmes to the integration of a European Research Area. This paper deepens the analysis on the integration and participation of peripheral regions, by focusing on the differences in intensity a...
We investigate the effects of R&D investment on performance outcomes (sales growth and relative profitability) for Indian manufacturing firms. Previous research shows contradictory results-while some studies find a positive effect of R&D on firm performance, some find that firms investing in R&D do not perform significantly better, in some cases, e...
The challenge for solo entrepreneurs to add their first employee is arguably the single biggest growth event facing any growing firm. To understand how this event affects performance, and the antecedents of hiring, we analyse Danish matched employer–employee data. Those who hire enjoy superior sales outcomes in subsequent years, while the dispersio...
Our concerns about the practice of patenting scientometric techniques began with an electronic notification alerting one of us to a patent titled “Scientometric Methods for Identifying Emerging Technologies”
This paper considers the impact of non-founder human capital on high-tech firms' long-run growth and survival. Drawing upon threshold theory, we explore how lack of access to complementary skills at different points in the life course impacts founders' thresholds for exit. We examine these factors using a unique longitudinal dataset tracking the pe...
JRC Policy Brief: Disentangling the processes of firm growth and R&D investment
This article investigates whether high-growth firms grow in different ways from other firms. Specifically, we analyze how firms grow along several dimensions (growth of sales, employment, assets, and operating profits) using Structural Vector Autoregressions. Causal relations are identified by using information contained in the (non-Gaussian) growt...
Strategies for firm growth vary in terms of their degrees of novelty, uncertainty and synergy. Modes of firm gr