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Persistent high-growth firms in China’s manufacturing

Author

Listed:
  • Daniele Moschella

    () (Scuola Superiore Sant’Anna)

  • Federico Tamagni

    () (Scuola Superiore Sant’Anna)

  • Xiaodan Yu

    () (Scuola Superiore Sant’Anna
    IBIMET-CNR
    Nottingham University Business School China, University of Nottingham Ningbo China)

Abstract

This article explores the association between persistence of high-growth and crucial dimensions of firm structure and performance (productivity, profits, investment patterns, innovation, and financial structures) to shed light on what makes a persistent high-growth firm. We employ a multidimensional definition of a high-growth firm that simultaneously accounts for growth of sales and employment, and design an empirical strategy that seeks to capture the “long-run” ability of high-growth firms to replicate their high-growth performance over time. Exploiting a large panel covering the period of the China’s miracle, we find that none of the considered firm attributes stands out as distinctive feature of persistent high-growth. This finding casts doubts on the long-run contribution of high-growth firms, in turn challenging the long-run effectiveness of policies supporting the creation and expansion of such firms.

Suggested Citation

  • Daniele Moschella & Federico Tamagni & Xiaodan Yu, 2019. "Persistent high-growth firms in China’s manufacturing," Small Business Economics, Springer, vol. 52(3), pages 573-594, March.
  • Handle: RePEc:kap:sbusec:v:52:y:2019:i:3:d:10.1007_s11187-017-9973-4
    DOI: 10.1007/s11187-017-9973-4
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    5. Yannis Caloghirou & Ioannis Giotopoulos & Alexandra Kontolaimou & Aggelos Tsakanikas, 0. "Inside the black box of high-growth firms in a crisis-hit economy: corporate strategy, employee human capital and R&D capabilities," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-27.
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    7. Erhardt, Eva, 2018. "Does high growth persist? A focus on growth formulas and the influence of firm exits," VfS Annual Conference 2018 (Freiburg, Breisgau): Digital Economy 181595, Verein für Socialpolitik / German Economic Association.
    8. Guarascio, Dario & Tamagni, Federico, 2019. "Persistence of innovation and patterns of firm growth," Research Policy, Elsevier, vol. 48(6), pages 1493-1512.
    9. Silviano Esteve-Pérez & Fabio Pieri & Diego Rodriguez, 2020. "One swallow does not make a summer:Episodes and persistence in high-growth," Studies on the Spanish Economy eee2020-03, FEDEA.
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    More about this item

    Keywords

    Entrepreneurship; High-growth firms; Persistent high-growth firms; China;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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