High-growth firms have recently received considerable attention in the firm growth literature. These firms might have grown despite the existence of growth barriers, and…
High-growth firms have recently received considerable attention in the firm growth literature. These firms might have grown despite the existence of growth barriers, and evidence also suggests that, having already grown exponentially, they may not be in the best position to grow further. Policies targeting high-growth firms may therefore be misdirected. We argue that entrepreneurship researchers should concentrate more on firms that are not hiring, despite having high profits. We call these firms “sleeping gazelles,” and demonstrate that they represented almost 10% of all limited liability firms in Sweden from 1997 to 2010. Nearly half of these firms continued to earn high or moderate profits in subsequent three-year periods, while still displaying no growth. Regression analyses indicate that these firms were significantly smaller, older, more likely to be active in industries with high profit uncertainty, and more likely to be located in less densely populated municipalities than were corresponding growing firms.
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.
High-growth firms (HGFs) have attracted an increasing amount of attention from researchers and policymakers, and the Eurostat-Organisation for Economic Co-operation and…
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.