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Young Innovative Companies: the new high-growth firms?

  • Dirk Czarnitzki
  • Julie Delanote

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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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. Andre van Stel & Martin Carree & Roy Thurik, . "The effect of entrepreneurial activity on national economic growth," Papers on Entrepreneurship, Growth and Public Policy 2005-04, Max Planck Institute of Economics, Entrepreneurship, Growth and Public Policy Group.
  2. Licht, Georg & Nerlinger, Eric A., 1997. "New Technology-Based Firms in Germany: A Survey of the Recent Evidence," ZEW Discussion Papers 97-18, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. repec:cup:cbooks:9780521608275 is not listed on IDEAS
  4. Mario Pianta & Andrea Vaona, 2006. "Firm size and Innovation in European Manufacturing," Kiel Working Papers 1284, Kiel Institute for the World Economy.
  5. Dunne, Paul & Hughes, Alan, 1994. "Age, Size, Growth and Survival: UK Companies in the 1980s," Journal of Industrial Economics, Wiley Blackwell, vol. 42(2), pages 115-40, June.
  6. Harrison, Rupert & Jaumandreu Balanzo, Jordi & Mairesse, Jacques & Peters, Bettina, 2008. "Does Innovation Stimulate Employment? A Firm-Level Analysis Using Comparable Micro-Data From Four European Countries," ZEW Discussion Papers 08-111, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. Storey, D. J. & Tether, B. S., 1998. "New technology-based firms in the European union: an introduction," Research Policy, Elsevier, vol. 26(9), pages 933-946, April.
  8. Dirk Czarnitzki & Kornelius Kraft, 2007. "Are credit ratings valuable information?," Applied Financial Economics, Taylor & Francis Journals, vol. 17(13), pages 1061-1070.
  9. Dachs, Bernhard & Peters, Bettina, 2013. "Innovation, employment growth, and foreign ownership of firms: A European perspective," ZEW Discussion Papers 13-019, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  10. Czarnitzki, Dirk & Kraft, Kornelius, 2004. "Innovation indicators and corporate credit ratings: evidence from German firms," Economics Letters, Elsevier, vol. 82(3), pages 377-384, March.
  11. repec:cup:cbooks:9780521845731 is not listed on IDEAS
  12. 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.
  13. Schneider, Cedric & Veugelers, Reinhilde, 2008. "On Young Innovative Companies: Why they matter and how (not) to policy support them," Working Papers 04-2008, Copenhagen Business School, Department of Economics.
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