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Are high-growth firms one-hit wonders? Evidence from Sweden

  • Daunfeldt, Sven-Olov

    ()

    (HUI Research)

  • Halvarsson, Daniel

    (The Royal Institute of Technology, Division of Economics)

Most firms do not grow, and a small number of high-growth firms seem to create most new jobs. These firms have therefore received increasing attention among policymakers. The question is whether high-growth tends to persist? We investigate this question using data on 432,689 observations in Sweden during 1997-2008. We find that high-growth firms had declining growth rates in the previous 3-year period, and their probability of repeating high growth rates was very low. HGFs are essentially “one-hit wonders”, and it is thus doubtful whether policymakers can improve economic outcomes by targeting them.

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Paper provided by HUI Research in its series HUI Working Papers with number 73.

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Length: 16 pages
Date of creation: 02 Nov 2012
Date of revision:
Handle: RePEc:hhs:huiwps:0073
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