IDEAS home Printed from https://ideas.repec.org/p/hhs/oruesi/2018_007.html
   My bibliography  Save this paper

An international comparison of the contribution to job creation by high growth firms

Author

Listed:

Abstract

This paper addresses three simple questions: how should the contribution of HGFs to job creation be measured? how much does this contribution vary across countries? to what extent does the cross-country variation depend on variation in the proportion of HGFs in the business population? The first is a methodological question which we answer using a more highly articulated version of the standard job creation and destruction accounts. The other two are empirical questions which we answer using a purpose-built dataset assembled from national firm-level sources and covering nine countries, spanning the ten three year periods from 2000/03 to 2009/12. The basic principle governing the development of the accounting framework is the choice of appropriate comparators. Firstly, when measuring contributions to job creation, we should focus on just job creating firms, otherwise we are summing over contributions from firms with positive, zero, and negative job creation numbers. Secondly, because we know growth depends in part on size, the ’natural’ comparison for HGFs is with job creation by similar-sized firms which simply did not grow as fast as HGFs. However, we also show how the measurement framework can be further extended to include, for example, a consistent measure of the contribution of small job creating firms. On the empirical side, we find that the HGF share of job creation by large job creating firms varies across countries by a factor of two, from around one third to two thirds. A relatively small proportion of this cross-country variation is accounted for by variations in the influence of HGFs on job creation. On average HGFs generated between three or four times as many jobs as large non-HGF job creating firms, but this ratio is relatively similar across countries. The bulk of the cross-country variation in HGF contribution to job creation is accounted for by the relative abundance (or rarity) of HGFs. Moreover, we also show that the measurement of abundance depends upon the choice of measurement framework: the ’winner’ of a cross-national HGF ’beauty context’ on one measure will not necessarily be the winner on another.

Suggested Citation

  • Anyadike-Danes, Michael & Bjuggren, Carl Magnus & Dumont, Michel & Gottschalk, Sandra & Hölzl, Werner & Johansson, Dan & Maliranta, Mika & Myrann, Anja & Nielsen, Kristian & Zheng, Guanyu, 2018. "An international comparison of the contribution to job creation by high growth firms," Working Papers 2018:7, Örebro University, School of Business.
    • Handle: RePEc:hhs:oruesi:2018_007
    as

    Download full text from publisher

    File URL: https://www.oru.se/globalassets/oru-sv/institutioner/hh/workingpapers/workingpapers2018/wp-7-2018.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Albert Bravo-Biosca & Chiara Criscuolo & Carlo Menon, 2016. "What drives the dynamics of business growth?," Economic Policy, CEPR;CES;MSH, vol. 31(88), pages 703-742.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Klaus Friesenbichler & Werner Hölzl, 2020. "High-growth firm shares in Austrian regions: the role of economic structures," Regional Studies, Taylor & Francis Journals, vol. 54(11), pages 1585-1595, November.
    2. Friesenbichler, Klaus S. & Hoelzl, Werner, 2022. "Firm-growth and Functional Strategic Domains: Exploratory evidence for differences between frontier and catching-up economies," Journal of Economics and Business, Elsevier, vol. 119(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ufuk Akcigit & Sina T. Ates, 2023. "What Happened to US Business Dynamism?," Journal of Political Economy, University of Chicago Press, vol. 131(8), pages 2059-2124.
    2. Bottasso, Anna & Conti, Maurizio & Sulis, Giovanni, 2017. "Firm dynamics and employment protection: Evidence from sectoral data," Labour Economics, Elsevier, vol. 48(C), pages 35-53.
    3. Friesenbichler, Klaus S. & Glocker, Christian, 2019. "Tradability and productivity growth differentials across EU Member States," Structural Change and Economic Dynamics, Elsevier, vol. 50(C), pages 1-13.
    4. Chiara Criscuolo & Angelo Secchi, 2016. "Resources (mis)allocation, innovation and the competitiveness of Europe," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 43(1), pages 1-9, March.
    5. Silviano Esteve-Pérez & Fabio Pieri & Diego Rodriguez, 2022. "One swallow does not make a summer: episodes and persistence in high growth," Small Business Economics, Springer, vol. 58(3), pages 1517-1544, March.
    6. Sara Amoroso & Benedikt Herrmann & Alexander S. Kritikos, 2023. "The Role of Regulation and Regional Government Quality for High Growth Firms: The Good, the Bad, and the Ugly," Discussion Papers of DIW Berlin 2053, DIW Berlin, German Institute for Economic Research.
    7. Gert Bijnens & Joep Konings, 2018. "Declining Business Dynamism," Working Papers of Department of Economics, Leuven 614199, KU Leuven, Faculty of Economics and Business (FEB), Department of Economics, Leuven.
    8. Giuseppe Orlando & Roberta Pelosi, 2020. "Non-Performing Loans for Italian Companies: When Time Matters. An Empirical Research on Estimating Probability to Default and Loss Given Default," IJFS, MDPI, vol. 8(4), pages 1-22, November.
    9. Ufuk Akcigit & Sina T. Ates, 2021. "Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory," American Economic Journal: Macroeconomics, American Economic Association, vol. 13(1), pages 257-298, January.
    10. J. De Mulder & H. Godefroid & C. Swartenbroekx, 2017. "Up or out ? Portrait of young high?growth firms in Belgium," Economic Review, National Bank of Belgium, issue iii, pages 93-113, December.
    11. Holtemöller, Oliver & Lindner, Axel, 2018. "Die wirtschaftliche Entwicklung Sachsen-Anhalts seit 1990," IWH Discussion Papers 6/2018, Halle Institute for Economic Research (IWH).
    12. Sander Wennekers & al et, 2014. "Entrepreneurship in the Netherlands - The Top sectors," Scales Research Reports A201417, EIM Business and Policy Research.
    13. Chiara Criscuolo & Peter N. Gal & Carlo Menon, 2014. "The Dynamics of Employment Growth: New Evidence from 18 Countries," CEP Discussion Papers dp1274, Centre for Economic Performance, LSE.
    14. Steffi Haag & Christina Chase & Gesa Miczaika & Kathrin Möslein & Dennis Steininger & Rüdiger Zarnekow & Joris Bohemen, 2023. "How Can the BISE Community Promote Tech Startups?," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 65(4), pages 475-482, August.
    15. Klaus Friesenbichler & Werner Hölzl, 2020. "High-growth firm shares in Austrian regions: the role of economic structures," Regional Studies, Taylor & Francis Journals, vol. 54(11), pages 1585-1595, November.
    16. Erhardt, Eva, 2017. "Who persistently creates jobs? Absolute versus relative high-growth firms," MPRA Paper 79307, University Library of Munich, Germany.
    17. Akcigit, Ufuk & Akgunduz, Yusuf Emre & Cilasun, Seyit Mumin & Ozcan-Tok, Elif & Yilmaz, Fatih, 2020. "Facts on business dynamism in Turkey," European Economic Review, Elsevier, vol. 128(C).
    18. Decker, Ryan A. & Haltiwanger, John & Jarmin, Ron S. & Miranda, Javier, 2016. "Where has all the skewness gone? The decline in high-growth (young) firms in the U.S," European Economic Review, Elsevier, vol. 86(C), pages 4-23.
    19. Ramy El-Dardiry & Benedikt Vogt, 2022. "How far Do gazelles run? Growth Patterns of Regular Firms, High Growth Firms and Startups," CPB Discussion Paper 432, CPB Netherlands Bureau for Economic Policy Analysis.
    20. Gert Bijnens & Jozef Konings, 2020. "Declining business dynamism in Belgium," Small Business Economics, Springer, vol. 54(4), pages 1201-1239, April.

    More about this item

    Keywords

    high-growth firms; firm growth; job creation;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:oruesi:2018_007. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ieoruse.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.