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High-growth firms’ contribution to aggregate productivity growth

Author

Listed:
  • Márta Bisztray

    (Budapest and Corvinus University Budapest, CERGE-EI Foundation, Teaching Fellow)

  • Francesca de Nicola

    (World Bank)

  • Balázs Muraközy

    (University of Liverpool Management School, Liverpool and KRTK)

Abstract

This paper investigates the contribution of high-growth firms (HGFs) to aggregate productivity growth, using Hungarian firm-level data. Three stylized facts emerge. First, output-based HGFs substantially outperform employment-based ones in terms of their productivity contribution: on average, sales-based HGFs contribute 5 times as much as employment-based ones. Further, the contribution of employment-based HGFs is negative in 48-50% of industry-years, compared to 25-31% for sales-based HGFs. Second, HGFs tend to contribute to productivity growth only during their high-growth phase but not afterwards. Third, HGFs’ contribution to productivity growth is higher in industries with more effective reallocation and with more young firms, but none of these are strong predictors of the HGFs’ contribution. Finally, we present a simple benchmark model to show that these patterns arise naturally under realistic correlation structures.

Suggested Citation

  • Márta Bisztray & Francesca de Nicola & Balázs Muraközy, 2023. "High-growth firms’ contribution to aggregate productivity growth," Small Business Economics, Springer, vol. 60(2), pages 771-811, February.
    • Handle: RePEc:kap:sbusec:v:60:y:2023:i:2:d:10.1007_s11187-022-00614-9
    DOI: 10.1007/s11187-022-00614-9
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