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Young Innovative Companies: the new high-growth firms?

Author

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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.

Suggested Citation

  • Dirk Czarnitzki & Julie Delanote, 2013. "Young Innovative Companies: the new high-growth firms?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(5), pages 1315-1340, October.
    • Handle: RePEc:oup:indcch:v:22:y:2013:i:5:p:1315-1340
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    File URL: http://hdl.handle.net/10.1093/icc/dts039
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    JEL classification:

    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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