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Young Innovative Companies: the new high-growth firms?

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  • Dirk Czarnitzki
  • Julie Delanote

Abstract

Young Innovative Companies (YIC) gained increasing attention from governments and scholars owing to their expected high innovative performance and growth. Consequently, this study investigates whether YICs, as defined by the European Union (EU), grow more than other firms, both in terms of employment and in terms of sales. Using a database of Flemish firms during the years 2001--2008, this study reveals that these firms do grow significantly more than other firms. In addition, this study shows that YICs can be differentiated from New Technology-Based Firms and small, young firms in terms of growth, pointing to the importance of combining the individual properties characterizing YICs, that is being young (<6 years), small (<250 employees), and R&D intensive (R&D intensity > 15%). In our estimations, we also take the underlying distribution of the growth variables into account by performing quantile regressions. The results of these quantile regressions reveal that YICs especially grow faster than the other, already fast-growing firms, indicating that they are high performers. In addition, we did not find that these companies perform significantly worse than the other firms. Copyright 2013 The Author 2012. Published by Oxford University Press on behalf of Associazione ICC. All rights reserved., Oxford University Press.

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Bibliographic Info

Article provided by Oxford University Press in its journal Industrial and Corporate Change.

Volume (Year): 22 (2013)
Issue (Month): 5 (October)
Pages: 1315-1340

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Handle: RePEc:oup:indcch:v:22:y:2013:i:5:p:1315-1340

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  1. Dachs, Bernhard & Peters, Bettina, 2013. "Innovation, employment growth, and foreign ownership of firms: A European perspective," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 13-019, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  2. Licht, Georg & Nerlinger, Eric A., 1997. "New Technology-Based Firms in Germany: A Survey of the Recent Evidence," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 97-18, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Dirk Czarnitzki & Kornelius Kraft, 2007. "Are credit ratings valuable information?," Applied Financial Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 17(13), pages 1061-1070.
  4. Mario Pianta & Andrea Vaona, 2006. "Firm size and Innovation in European Manufacturing," Kiel Working Papers, Kiel Institute for the World Economy 1284, Kiel Institute for the World Economy.
  5. Harrison, Rupert & Jaumandreu, Jordi & Mairesse, Jacques & Peters, Bettina, 2014. "Does innovation stimulate employment? A firm-level analysis using comparable micro-data from four European countries," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 35(C), pages 29-43.
  6. Delmar, Frederic & Davidsson, Per & Gartner, William B., 2003. "Arriving at the high-growth firm," Journal of Business Venturing, Elsevier, vol. 18(2), pages 189-216, March.
  7. Andre van Stel & Martin Carree & Roy Thurik, . "The effect of entrepreneurial activity on national economic growth," Papers on Entrepreneurship, Growth and Public Policy, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group 2005-04, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  8. Dunne, Paul & Hughes, Alan, 1994. "Age, Size, Growth and Survival: UK Companies in the 1980s," Journal of Industrial Economics, Wiley Blackwell, Wiley Blackwell, vol. 42(2), pages 115-40, June.
  9. Czarnitzki, Dirk & Kraft, Kornelius, 2004. "Innovation indicators and corporate credit ratings: evidence from German firms," Economics Letters, Elsevier, Elsevier, vol. 82(3), pages 377-384, March.
  10. Storey, D. J. & Tether, B. S., 1998. "New technology-based firms in the European union: an introduction," Research Policy, Elsevier, Elsevier, vol. 26(9), pages 933-946, April.
  11. Schneider, Cedric & Veugelers, Reinhilde, 2008. "On Young Innovative Companies: Why they matter and how (not) to policy support them," Working Papers, Copenhagen Business School, Department of Economics 04-2008, Copenhagen Business School, Department of Economics.
  12. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521845731.
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Cited by:
  1. Audretsch, David B. & Segarra Blasco, Agustí, 1958- & Teruel, Mercedes, 2014. "Why not all young firms invest in R&D," Working Papers, Universitat Rovira i Virgili, Department of Economics 2072/225296, Universitat Rovira i Virgili, Department of Economics.
  2. Daria Ciriaci & Pietro Moncada-Paterno-Castello & Peter Voigt, 2012. "Does size or age of innovative firms affect their growth persistence? Evidence from a panel of innovative Spanish firms," JRC-IPTS Working Papers, Institute for Prospective and Technological Studies, Joint Research Centre JRC74052, Institute for Prospective and Technological Studies, Joint Research Centre, revised Sep 2012.
  3. Daria Ciriaci & Pietro Moncada-Paternò-Castello & Peter Voigt, 2013. "Innovation and Job Creation: A sustainable relation?," JRC-IPTS Working Papers on Corporate R&D and Innovation, Institute of Prospective Technological Studies, Joint Research Centre 2013-01, Institute of Prospective Technological Studies, Joint Research Centre.
  4. Teixeira, Aurora A.C. & Tavares-Lehmann, Ana Teresa, 2014. "Human capital intensity in technology-based firms located in Portugal: Does foreign ownership matter?," Research Policy, Elsevier, Elsevier, vol. 43(4), pages 737-748.
  5. Vivarelli, Marco, 2014. "Structural Change and Innovation as Exit Strategies from the Middle Income Trap," IZA Discussion Papers 8148, Institute for the Study of Labor (IZA).
  6. Balsmeier, Benjamin & Czarnitzki, Dirk, 2014. "How important is industry-specific managerial experience for innovative firm performance?," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 14-011, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. H. T. Tran & E. Santarelli, 2013. "Revisiting Italian Emigration Before the Great War: A Test of the Standard Economic Model," Working Papers, Dipartimento Scienze Economiche, Universita' di Bologna wp909, Dipartimento Scienze Economiche, Universita' di Bologna.
  8. Segarra Blasco, Agustí, 1958- & Gombau, Verònica, 2013. "Young innovative firms and R&D strategies: is the Spanish case different?," Working Papers, Universitat Rovira i Virgili, Department of Economics 2072/222200, Universitat Rovira i Virgili, Department of Economics.
  9. Heike Belitz & Anna Lejpras, 2014. "Financing Patterns of Innovative SMEs and the Perception of Innovation Barriers in Germany," Discussion Papers of DIW Berlin, DIW Berlin, German Institute for Economic Research 1353, DIW Berlin, German Institute for Economic Research.

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