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Russian transport high-growth firms during the COVID-19 pandemic
Abstract
The Russian transport industry is an important sector of the Russian economy. Because of a large territory, Russian supply chains and human flows face unique challenges, inducted by natural and anthropogenic reasons. One of them is the COVID-19 pandemic, which caused supply chains disruption and changes in travel plans. The paper aims to identify the differences in the reaction of Russian transport high-growth firms and other transport firms’ performance on the COVID-19 pandemic. The sample includes 2621 transport firms (including 119 high-growth firms). The research uses the official financial data provided by Rosstat and the Russian Tax Service. The hypotheses are tested on 2020 data using one-way ANOVA. The research showed no significant differences in high-growth and normal firms’ profitability, efficiency, and solvency. High-growth firms keep a better ability to grow in pandemic and employability. High-growth firms allow the whole industry to keep a good development perspective. The research results agree with earlier studies and confirm that high-growth firms are vital for transport sector development.
... There is no stable tendency of greater profitability of HGF. The greater solvency and efficiency tendencies of gazelles vary across studies [17][18][19]. ...
... Concentration among small gazelles is close to the sample value (5.18%). This concentration value is consistent with global trends [2], however, higher than previously studied industries in Russia [17][18][19]. Medium and large sized HGFs have concentration less than 4%. These values are closer to earlier calculated average concentration of gazelles in across middle-sized firms (3,09%) in Russia [18]. ...
... Most of gazelles are not able to prolong extremely high rates of growth more than 3 year and lost this status on the next year after holding it . These results are consistent with the trends previously identified by the authors [17][18][19]. The performance results of gazelles and normal firms with hypothesis testing in 2019 are presented in Table 1. between normal and high-growth firms are significant Source: authors' calculations High-growth firms demonstrate better performance than normal firms in 2019. ...
High-growth firms (gazelles) are important drivers of economic growth, being one of the key employment creators. COVID-19 pandemic hit the global and national economy. Dozens of industries suffer from epidemic restrictions. Gazelles did not stand aside and also suffered losses. Current research reveals the difference in performance of normal and high-growth firms in Russian energetic industry based on the financial reports data. The sample of energetic firms includes 3,066 normal and 162 high-growth firms. The performance is evaluated through the system of 6 indicators. The authors test 6 hypotheses (using one-way ANOVA) of better gazelles’ ability to grow, efficiency, solvency, and employability than normal firms in 2019-2021. The pandemic hit firm’s revenue growth in 2020, but gazelles had better ability to grow in 2019-2020. However, normal firms increased revenue greater than HGFs in 2021. Gazelles have higher profitability, solvency and employment creation abilities in comparison with normal firms. Firm efficiency doesn’t significantly differ between normal firms and HGFs.
... Schepers et al. [2021] put forth the view that operations and sales threats have had the most signi¯cant impact on the growth-oriented¯rms (HGFs) during the pandemic. The speci¯c feature of past research is detecting sales-related and operations-related threats decreasing from highly sig-ni¯cant at the start of the COVID-19 pandemic and during wave 1, to less signi¯cant in wave 2. Indeed, there are a limited number of research studies concerning HGFs in the context of the COVID-19 pandemic [Pletnev and Naumova (2022)]. The 2020 pandemic has hit the revenue growth and pro¯tability of Russian HGFs; at the same time, this segment of companies remains among the leaders in terms of headcount growth, although its rate has slowed down. ...
... [2014] support this approach. However, in detail,¯rm performance can be described as a combination of the following characteristics: ability to grow [Santos and Brito (2012) A similar methodological approach was previously applied for transport industry research [Pletnev and Naumova (2022)], with the following results. HGFs in transport have exhibited better ability to grow and better employability during the pandemic when compared with normal¯rms. ...
The COVID-19 pandemic is a substantial challenge for national economies. The survivability and better performance of some companies can serve as lessons for others, and those who learn the said lessons faster will take the lead in the post-COVID world. One of the national economic development drivers is high-growth firms (HGFs), also known as gazelles. High-growth middle-sized firms (HGMFs) have a notable impact on the national economy as significant employers, producers, and tax-payers. This paper aims to find the peculiarities in the reactions of HGMFs to the COVID-19 pandemic based on Russian firms’ data. This research uses the official statistics of middle-sized Russian firms (7944 firms, 238 gazelles). Gazelles are identified based on 2016–2019 data and then compared with normal medium-sized firms (NMFs) using 2020 data. In total, 14 hypotheses are formulated and tested, with those hypotheses focused on five aspects of firms’ performance: the ability to grow, profitability, efficiency, solvency, and employability. The research utilizes a one-way ANOVA test and Z-test for proportions for different types of hypotheses. Hypotheses testing shows that HGFs demonstrate better ability to grow, better efficiency, better solvency, and better employability than normal firms. However, they cannot maintain their higher profitability in 2020, despite higher net income values in comparison with other companies. The research confirms that HGMFs have unique capabilities to overcome these kinds of crises, and that such capabilities can be scaled to other business entities to increase their survivability in times of future crises. The research can be extended to small firms, 2021-year data analysis, and comparative cross-industry or cross-country analysis.
... There is no precise evidence of greater Orthodox Gazelles Performance and Advantages During the Pandemic (Russian Case) profitability of HGFs. Gazelles' tendency to have greater solvency and efficiency vary across studies with some exceptions (Pletnev & Naumova, 2022, 2023a. ...
Пандемия стала серьезным вызовом для бизнеса, выступая лакмусовой бумагой успешности и устойчивости тех или иных подходов к ведению бизнеса в условиях высокой турбулентности. Быстрорастущие компании («газели»)-значимый фактор экономического роста, обычно именно они создают значительную часть новых рабочих мест в экономике. Если эта функция «газелей» сохраняется и в кризис, то такие фирмы стоит поддерживать государству для скорейшего и плавного выхода из него. При этом и сами быстрорастущие фирмы неоднородны, среди них есть т.н. ортодоксальные, имеющие внутренние факторы роста, и неортодоксальные, получающие преимущества по большей части извне. Целью исследования является выявление различий в способности сохранять и создавать новые рабочие места российских быстрорастущих фирм в сравнении с другими компаниями. Методология исследования опирается на существующие методы выявления и идентификации быстрорастущих компаний, авторскую типологию быстрорастущих компаний, а оценка их способности к продолжающемуся росту и финансовой эффективности-на известных подходах к оценке финансового состояния фирмы. На основе данных официальной статистики и налоговой отчетности сформирована выборка 4420 компаний, проведена идентификация быстрорастущих компаний и их типология с выделением ортодоксальных (классических). Выявлены значимые различия в сохранении и создании рабочих мест «газелями» и обычными компаниями как в нормальных условиях (2019 г.), так и в условиях пандемийного кризиса (2020 и 2021 гг.). Установлено, что ортодоксальные газели в условиях пандемии были столь же результативны в сохранении и создании рабочих мест, как и неортодоксальные. Результаты исследования могут использоваться органами государственной власти для совершенствования политики в области развития промышленности и обеспечения экономического роста.
The main goal of this article is to evaluate and analyze the effect of natural resources utilization efficiency on green economic growth in 5 emerging economies (Brazil, Russia, India, China, and South Africa) in the BRICS group. The panel data approach is employed to estimate coefficients by calculating the resource activity coefficient and gathering annual data for 2000–2020. The major results confirm that natural resource utilization efficiency accelerates the green economic growth of BRICS countries. Moreover, the presence of an uni-directional causal linkage from resource utilization efficiency to green economic growth is concluded, meaning that in the short-term, natural resource utilization efficiency can cause green economic growth in BRICS economies. As practical policies, promoting green FDI to increase green technologies transfer, green financing to promote technological innovation, and implementing the principle of 3Rs (Reduce, reuse, recycle) are recommended.
Research on gazelles (high-growth) companies has been increasing exponentially in the last decade. It is especially evident from 2013 onwards. This article offers an overview of academic literature development published from 2000 to 2021 regarding Gazelles firms in 84 peer-reviewed articles from the Web of Science. We applied a novel methodological approach to compare results from different bibliometric analyses using VOSviewer software, analysing three indicators, journals, articles, and author by citations, co-citations, and bibliographic coupling. We also analysed the co-occurrence of keywords Plus. The results provided four thematic clusters: entrepreneurship, performance, innovation, and dynamics. We presented the most relevant contributions and a future research agenda for each cluster to address the field gaps.
This study explores how the COVID-19 pandemic has forced Flemish growth-oriented entrepreneurs to build entrepreneurial resilience. We rely on a research framework that consists of a “challenge-reaction-learning loop” to empirically investigate how entrepreneurial resilience is built in times of the COVID-19 crisis. To investigate this complex entrepreneurial learning process, we use data that have been collected during the first and second wave of the COVID-19 pandemic. By using several datapoints, we could identify (1) the specific challenges growth-oriented firms are facing as a result of the COVID-19 crisis; (2) how these entrepreneurs reacted to these challenges; and (3) what they learned during the first and second wave of the pandemic and how they perceive the future. By making this entrepreneurial learning process explicit and dividing it into an iterative “challenge-reaction-learning loop”, this study is relevant for all entrepreneurs, as it contains several interesting lessons learned. We also contribute to academic literature as we provide future researchers a tangible framework to further elucidate how entrepreneurial resilience is built in times of crisis.
Our paper aims to participate to the growing policy discussion on high-growth firms (HGFs) by analyzing persistence of high growth patterns over crisis. During downturn periods, such as post pandemic one, policy makers seek sources to maintain competitiveness and accelerate growth. Being dynamic players in economic growth and job creation, persistent high-growth firms are notable candidates for assuming that role under such circumstances. Therefore, in this study we explore the determinants and characteristics of HGFs and persistent high-growth firms (PHGF) in a crisis scenario.We use a sample of 190,247 firms from 2007 to 2014. We estimate a multinomial probit model with independent idiosyncratic components across the different categories (i.e. HGFs, PHGFs and other firms) using full maximum likelihood. In a second phase we explore which characteristics of HGFs affect the probability of being a PHGFs.HGFs are characterized by higher productivity and leverage, and PHGFs systematically differ from other HGFs only in what regards degree of international involvement. HGFs probability of maintaining high growth rates is very low.HGFs are essentially one-hit wonders and it is debatable whether policymakers can enhance economic results by targeting them. Policy makers should be directed towards those firms which have in principal the potential to be winners, but only through policy intervention these aided firms can realize their great potential (i.e. pick and build winner).
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 being a HGE is positively associated with the probability that a firm conducts international activities, particularly FDI. Conversely, the internationalisation process seems to trigger strong subsequent firm-growth only for FDI, not for exports. Furthermore, we show evidence on the positive association between firms that are internationalised and those adopting new digital technologies. The adoption of new digital technologies is indirectly related to the status of being a HGE via internationalisation activity in the current period. Our results highlight the complex influence of exporting and FDI on the capacity to become a HGE and the role of new digital technologies in this process.
High-growth firms provide a substantial stake in the national economy growth and supply job creation. Research of gazelle stability, allocation and success play an essential role in understanding the manufacturing and economic growth overall. The paper aims to present the results of high-growth firms analysis in the Russian transport sector. The authors propose the high-growth firms’ detection methods based on accounting data and analyze the allocation of high-growth firms according to the sectors ( railway and highway transport) and by federal districts of Russia. The authors define total revenue trends of high-growing firms comparing with ordinal firms and inside transport sectors. This study pays special attention to the evaluation of the further high-growth firms’ success in 2016-18. The most common phenomenon of high-growth firms is sacrificing the profit to achieve an accelerated growth rate.
How do high-growth firms (HGFs) affect the rest of the economy? We explore this question using Hungarian administrative microdata. Relying on the Birch definition of HGFs, we find evidence for stronger productivity growth for firms operating in industries with more HGFs and for firms supplying industries with more HGFs. Knowledge spillovers or the surge of HGFs’ demand for intermediate inputs could explain these positive associations. Firms with intermediate productivity levels seem most likely to benefit from this effect, while we find no differences by age or export status. The results hold irrespective of the level of spatial aggregation and are robust to alternative definitions of HGFs as well as different measures of productivity or spillover.
Does high growth persist? This study shows how the answer to this question depends on the measurement of growth. It systematically compares the consequences of different choices (absolute, relative, and composite growth formulas) on three notions of persistence: repetition of high growth, future growth of surviving high-growth firms, and overall future growth of both survivors and exits. The empirical analysis is based on administrative data from Amadeus on Bulgarian firms for 3-year periods of growth between 2001 and 2010. The focus is on total growth in employees. Our findings demonstrate how results largely vary between growth measures. Moreover, we detect empirical regularity related to growth measures in previous evidence. Most importantly, if persistence is understood as overall future growth including both the contributions by surviving and exiting firms, then high growth does not persist.
This paper estimates the impact of innovation and other business characteristics on turnover growth, paying particular attention to firms that show high growth in turnover. In the United States, Europe and Australia, high-growth firms have contributed significantly to sales, employment and exports. Using unique unit record data and advanced panel data techniques, this is the first paper to examine the patterns, characteristics and determinants of high-growth firms in Australia. The paper focusses on the roles of innovation and research and development in driving turnover growth. The paper finds that the type of innovation undertaken matters for growth. On average, innovation in goods and services or marketing contributes significantly to turnover growth, while process and organisational/managerial innovations do not. Having a strategic business focus on innovation also contributes to turnover growth. The paper also finds that the impacts of innovation and research and development differ between high-growth firms and average firms. Goods and services innovations have a much greater impact for high-growth firms. The benefits of research and development are also skewed, with high-growth firms generating a substantially greater boost to turnover growth from increased research and development intensity compared to slower growing firms. JEL Codes: C01, C21, C23, D8, D22, H, L6, L7, M13, O3, O4, O5
The study on the framework conditions for high-growth innovative enterprises (HGIE) relates HGIE performance to the prevailing entrepreneurial framework conditions in 37 countries, including all EU Member States, other European countries and five non-European countries selected for their outstanding track record on HGE performance. The study brings together the most recent data on high-growth firm performance and entrepreneurial framework conditions with a specific focus on HGIEs. Key indicators on HGIE performance over the period 2012-2014 show that in our country sample the share of HGIEs is on average 0.16 % of the firm population, representing 3.3 % of total employment. Measured through a set of indicators in six policy areas, the performance scores in entrepreneurial framework conditions of the 37 countries is below 4.0 out of a maximum of 6.0. The EU-28 average performance is below this all-country average. Based on the scores obtained, countries were grouped into frontrunners (with only one EU-28 country: Sweden), near frontrunners, pursuers and laggards. Main policy recommendations to foster HGIE growth include an integrated approach to HGIE growth, dedicated policies with life-cycle support, reinforcement of ecosystems, more action at EU-level and addressing more relevant framework conditions.
Link to publication: https://bookshop.europa.eu/en/framework-conditions-for-high-growth-innovative-enterprises-hgie--pbKI0616028/;pgid=GSPefJMEtXBSR0dT6jbGakZD0000L5V-kacO;sid=ig793tGLy3_93olzwrFjebOuKM2BjtZYjN0=?AllPersonalAuthorNames=true
Promoting high growth firms (HGFs) has become a strong fixation within enterprise policy. This is a debate article seeking to examine and challenge the mythology perpetuated by policy makers and embedded within high growth entrepreneurship policy frameworks. Within the article we argue that a number of distinctive ‘myths’ have become deeply embedded within these policy frameworks. Such myths have been built on misconceived preconceptions of HGFs, which has resulted in policy-makers taking a myopic view of these firms. A key aim of the paper is to highlight how false perceptions of HGFs translate into inappropriate policy interventions. The paper challenges some of the most commonly held myths about these firms (that they are predominantly young, small, high-tech, VC-backed, university spin-outs, who grow in an orderly organic fashion, operating similarly irrespective of location) and identifies a clear mismatch between how policy makers perceive HGFs and what they actually look like in reality. Suggestions for the design of future policy approaches are forwarded.
There is a lack of knowledge about how policies can support thriving of high-growth innovative enterprises (HGIEs). This report analyses policies for HGIEs in eight countries: Germany, France, United Kingdom, Poland, Switzerland, USA, South Korea and Japan. Primary data was collected in March 2013 in a survey of 580 HGIEs in these countries. High growth was defined as at least one third increase in employment in three consecutive years in the past five years. Primary and secondary data was used for an analysis of national policies. Governments seeking to support HGIEs should consider HGIE characteristics such as older age, possible spin-off origin as well as national and sectoral specificities. Policies should be fine-tuned to improve framework conditions (in particular company taxation and labour law), target key barriers for growth (especially regulations for starting and growing a company, difficult access to finance, a lack of skilled employees), and foster key growth factors (e.g. fostering the ability and readiness to actively target growth) as well as internationalisation of HGIEs (because most of them currently focus on national markets). A focus on high-growth coaching and expanding related networks across Europe may be worthwhile considering.
Tentatively, the following policy measures from the countries surveyed might be considered as good practice for fostering HGIEs: The High-Tech Start-up Fund in Germany, the GrowthAccelerator programme in the UK, and CTI Start-up coaching in Switzerland.
However, a lack of policy evaluation is a key issue. There is as yet only little scientific evidence about the effectiveness and efficiency of specific HGIE support measures on which recommendations to adopt apparently successful measures from one country to another could be based. However, the number and scope of policy measures for HGIEs as well as the time of the policies’ establishment are increasing, and awareness for policy evaluation is apparently also enhancing. Thus the scientific base for assessing HGIE policies may become more solid soon.
In the paper, we assess the relationship between a firm's sales growth (dependent variable) and four independent variables: (1) firm size, (2) profitability, (3) educational level and (4) indebtedness. We also used control variables for industry, liability legal form and governance structure. Only the trade dummy proved to be a significant, therefore the interaction terms between the trade dummy and four independent variables were made. Using a stepwise multiple least square dummy variable regression, we identified a statistically significant and negative relationship for firm size and profitability. The impact of educational level is significantly positive, whereas indebtedness is not significant.
This article researches existence of young, high growth enterprises, "gazelles", in the context of high growth enterprises in Czech Republic. For this purpose the authors have analyzed dynamics of growth of enterprise subjects referred to as "gazelles" in a population of high growth enterprises and all enterprise subjects in a given economy. Two following criteria were taken into consideration: turnover and employment growth. Research of relevant data respects the sector criterion and monitors a 6-year growth period. It is stated that young, high growth enterprises-"gazelles"-in Czech Republic and in other compared countries are represented by enterprises which, even during the crisis period, by their development generate increase in new working positions as well as increase in annual turnover. They make up an important part of enterprises of all compared countries, and they contribute significantly to competitiveness of given economies. During the observed period the prevalence of gazelles was higher in the service sector in all compared countries, and there is an obvious transfer of gazelle enterprises from the manufacturing sector to the service sector.
Enterprise policy is increasingly favouring support for high growth firms (HGFs). However, this may be less effective in promoting
new jobs and economic development in peripheral regions. This issue is addressed by a study of HGFs in Scotland. Scottish
HGFs differ in a number of respects from the stylised facts in the literature. They create less employment than their counterparts
elsewhere in the UK. Most have a significant physical presence outside of Scotland, thereby reducing their Scottish ‘footprint’
and domestic job creation. Scottish HGFs appear to have a high propensity to be acquired, increasing the susceptibility of
the head office to closure. The evidence suggests that the tendency towards ‘policy universalism’ in the sphere of entrepreneurship
policy is problematic.
In the analysis of the impact of new business formation on regional employment change, considerable time lags were identified. The structure and extent of these time lags were investigated by applying the Almon lag model and it was found that new firms can have both a positive and a negative effect on regional employment. The results indicate that the indirect effects of new business formation (crowding out of competitors, improvement of supply conditions and improved competitiveness) are of greater magnitude than the direct effect, i.e. the jobs created in the new entities. The peak of the positive impact of new businesses on regional development is reached about 8 years after entry.
Much of the theoretical work on industry dynamics focuses on the role of ‘noisy’ selection and incomplete information on firm
entry and survival. We extend this research by looking at the impact of firm heterogeneity on employment effects for 320 U.S.
Metropolitan Statistical Areas (MSA). We find that only start-ups with greater than 20 and less than 500 employees have persistent
employment effects over time and only in large diversified metropolitan regions. Therefore, both the type of entry (Gazelles)
and the characteristics of the region are important for employment growth.
Purpose
This paper aims to analyze the effect of industry growth rates on the characteristics of high-growth firms (HGFs) that are active in a particular industry. By making a distinction between HGFs active in stable and declining industries and HGFs active in growing and high-growing industries, it is analyzed if the main dimensions of firm performance are significantly different for HGFs active in one of these different industry types. Gaining more insight into this industry aspect of high firm growth is important as governmental measures towards HGFs may be more effective if they have a specific sectoral focus.
Design/methodology/approach
A subset of 740 Belgian HGFs was analyzed. Data were gathered from the Belfirst database. HGFs were classified within their corresponding industry type: a declining industry (negative growth), a stable industry (0 −5% growth), a growing industry (5 −10% growth) and a high-growth industry (>10% growth). Four dimensions of structural firm performance that are expected to correlate with high growth were taken into consideration: productivity (value added per FTE), profitability (ROA), innovativeness (intangible assets) and financial health (solvency and liquidity).Tukey's range tests in conjunction with post-hoc analysis of variance (ANOVA) tests were carried out to test for significant differences in all the mentioned variables for the HGFs in the four different industry types.
Findings
Results show that HGFs active in a stable industry are not significantly more profitable or innovative than HGFs active in a growth industry. However, significant differences could be encountered when it comes to the other two dimensions of structural firm performance: productivity and financial health. It is shown that HGFs active in declining and stable industries are significantly more productive than HGFs active in growth industries and high-growth industries. Also, HGFs active in declining and stable industries have significantly higher liquidity ratios than firms active in growth industries, pointing towards a better financial health for HGFs in nongrowing industries.
Research limitations/implications
The results confirm the conceptual logic that the differences between resource-based view (RBV) and industrial organization (IO) propositions will have an impact on the drivers of firm performance and high business growth. Every future study that focuses on the growth determinants of HGFs should be aware that considering the subset of HGFs as one homogenous group may be suboptimal. It is likely that the growth determinants of both HGF types will indeed be fundamentally different.
Originality/value
Until now, all studies on HGFs have considered the subset of HGFs as a whole. This paper tried to disentangle the subset based on the growth rate of the industry in which HGFs are mainly active. In this proposition, a reason for the lack of knowledge about characteristics of HGFs may – at least partially – be found in the fact that industry membership plays an important role in determining the characteristics of a high-growth firm. Future studies focusing on high-growth determinants may benefit from systematically taking the industry growth rates into account, with the knowledge that the propositions of two different theories – IO and RBV – may be the fundamental drivers of a firm's high-growth rates.
In most developed countries, high growth firms (HGFs) are disproportionately responsible for net job creation, yet there is little information about how well such firms sustain their performance over time. Using GMM on a panel of 79,200 Romanian SMEs from 2000 to 2012, this paper evaluates the extent to which HGFs register stable and sustained growth over time, accounting for a variety of definitions for “high growth” that have been used in academic and policy literatures. Our results indicate that high growth SMEs are unable to maintain high growth rates for long, but do register lower volatility in growth rates and higher chances of survival. Identification of HGFs and results regarding growth volatility and persistence vary significantly with the specific definition of “high growth” used, as well as with the specific variable used to measure growth (e.g., revenue, employees, profit, productivity). Our findings have direct implications for growth policies and programs that depend on identifying HGFs.
The fate of a high-growth company in Russia often turns out to be dramatic. Yesterday’s leaders slow down, introducing an imbalance in the economy and reducing its potential, sometimes go bankrupt. The study aims to identify economic, institutional, and administrative factors that cause rapid growth or consequent fall of fast-growing firms in Russia. The article based on the results of the analysis of 104 high-growth Russian companies that included in the national rating. This paper is used empirical data from different sources and also regression models. This research is limited in time (2010–2017) and space (Russian economy). Also, limitation of the research is data source—not all Russian private high-growth firms are transparent and accessible disclose information about its success story. The main findings are the importance of industry affiliation of company, entrepreneurial nature of the firm, and lack of influence of administrative power on long-term business success.
The result of the study shows that liquidity ratio and firm age increases the probability of firm becoming high growth or low growth. However, the result indicates that the chances of being high-growth firm are higher for young firms. Quantile results show that the coefficient of liquidity ratio switches from negative in lower quantiles to become positive in upper quantile with the strong positive effect and firm age coefficients are largest in the lower quantiles. These results also confirm the probit result as per which firm age is negatively significant with the growth of the firm. The present study considers an innovative approach that considers balance sheet issued the year prior to the observation of rapid growth as predictors of firm growth (similar to the credit scoring models, i.e. the Z-score model, to measure the probability of default).
High-growth firms (HGFs) make a considerable contribution to economic growth, and in recent years they have received increasing interest from entrepreneurship scholars. By analysing recent findings in the literature of high-growth firms, this study identifies some Stylized Facts, as well as contradictory findings, and also some unknowns regarding the determinants and internal strategies of HGFs, particularly on the persistence of their superior growth performance and the implications of recent findings for economic policy.
Most firms do not grow, and a small number of high-growth firms seem to create most new jobs. These firms have therefore received increasing attention among policymakers. The question is whether high-growth tends to persist? We investigate this question using firm-level data from Sweden during 1997-2008. We find that high-growth firms had declining growth rates in the previous 3-year period, and their probability of repeating high growth rates was very low. Thus, these are essentially “one-hit wonders,” and it is doubtful whether policymakers can improve economic outcomes by targeting them.
This STI Working Paper deals with this group of rapidly expanding firms. It does so by placing the discussion into a context of entrepreneurship, arguing that there are two main aspects to this notion: one of business start-ups and market entry, and another one of innovation. Evidence is based on results from five OECD countries (Germany, Italy, Netherlands, Spain and Sweden) as well as from Quebec (Canada). Each of these studies used a firm-level data set to identify high-growth firms and their differentiating characteristics. High-growth firms are those firms that rank first according to a measure that combines relative (percentage) and absolute rates of employment expansion.Despite considerable differences in the underlying data and some of the methodologies, number of common findings emerge: High-growth firms account for a disproportionately large part of gross jobs gained. Small firms exhibit higher net job creation rates than large firms do. At the same time, significant flows ...
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