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.
The authors use a longitudinal firm-level data set to analyze the implications of using the Eurostat-OECD definition.
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.
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.
Policy based on the Eurostat-OECD definition of HGFs might be misleading or even counterproductive.
No previous studies have analyzed the implications of using the Eurostat-OECD definition of HGFs.
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.
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
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