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Using the eurostat-OECD definition of high-growth firms: a cautionary note

Sven-Olov Daunfeldt (HUI Research, Stockholm, Sweden)
Dan Johansson (HUI Research, Stockholm, Sweden)
Daniel Halvarsson (The Ratio Institute, Stockholm, Sweden)

Journal of Entrepreneurship and Public Policy

ISSN: 2045-2101

Article publication date: 13 April 2015

Abstract

Purpose

High-growth firms (HGFs) have attracted an increasing amount of attention from researchers and policymakers, and the Eurostat-Organisation for Economic Co-operation and Development (OECD) definition of HGFs has become increasingly popular. The paper aims to discuss this issue.

Design/methodology/approach

The authors use a longitudinal firm-level data set to analyze the implications of using the Eurostat-OECD definition.

Findings

The results indicate that this definition excluded almost 95 percent of surviving firms in Sweden, and about 40 percent of new private jobs during 2005-2008.

Research limitations/implications

The proportion of small firms and their growth patterns differ across countries, and the authors therefore advise caution in using this definition in future studies.

Practical implications

Policy based on the Eurostat-OECD definition of HGFs might be misleading or even counterproductive.

Originality/value

No previous studies have analyzed the implications of using the Eurostat-OECD definition of HGFs.

Keywords

Acknowledgements

The authors are grateful for comments on an earlier version of this paper by Björn Falkenhall, Håkan Alm, Fredrik Åkerlind, and participants at a seminar at the Research Institute for the Finnish Economy (ETLA). The authors also want to thank The Swedish Agency for Growth Policy Analysis for providing data.

Citation

Daunfeldt, S.-O., Johansson, D. and Halvarsson, D. (2015), "Using the eurostat-OECD definition of high-growth firms: a cautionary note", Journal of Entrepreneurship and Public Policy, Vol. 4 No. 1, pp. 50-56. https://doi.org/10.1108/JEPP-05-2013-0020

Publisher

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Emerald Group Publishing Limited

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