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High-growth firms: Not so vital after all?

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  • Daunfeldt, Sven-Olov

    () (HUI Research)

  • Halvarsson, Daniel

    (RATIO - Näringslivets Forskningsinstitut)

  • Mihaescu, Oana

    () (HUI Research)

Abstract

High-growth firms have received considerable interest recently since they create most of the new jobs in the economy. The purpose of our paper is to investigate the characteristics of high-growth firms prior to their growth period, and whether these characteristics differ across industries. Using data on a large sample of limited liability firms in Sweden for the period 2007-2010, we find that high-growth firms do not have the characteristics that we typically associate with successful firms. On the contrary, our results indicate that high-growth firms have low profits and a weak financial position. This might explain why studies have found that high-growth firms are seldom capable of sustaining their high growth rates in subsequent periods, and thus question policies that are targeted towards these companies.

Suggested Citation

  • Daunfeldt, Sven-Olov & Halvarsson, Daniel & Mihaescu, Oana, 2015. "High-growth firms: Not so vital after all?," HUI Working Papers 114, HUI Research.
  • Handle: RePEc:hhs:huiwps:0114
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    References listed on IDEAS

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    Cited by:

    1. Naudé, Wim, 2016. "Is European Entrepreneurship in Crisis?," IZA Discussion Papers 9817, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    entrepreneurship; firm growth; gazelles; high-growth firms; high-impact firms; innovation;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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