High-Growth Firms: Stylized Facts and Conflicting Results

Moreno, Fabiana; Coad, Alex

doi:10.1108/s1074-754020150000017016

Cited by 39 publications

(14 citation statements)

References 68 publications

(19 reference statements)

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“…This aspect has not gone unnoticed by other researchers (Sleuwaegen & Ramboer, 2020; Moreno & Coad, 2015). As Moreno and Coad (2015, p. 222) point out, ‘regional economic performance may display persistence in a number of dimensions, such as infrastructure, cultural attitudes, and social institutions, that might lead some regions to consistently have higher HGF rates than others’. Even if most HGFs are one-hit wonders, the regions hosting them might not be, and this thus has substantial policy implications.…”

Section: Discussionmentioning

confidence: 80%

“…The results here obtained suggest that interregional differences in HGF rates persist through time, in the short-to-medium run. This aspect has not gone unnoticed by other researchers (Sleuwaegen & Ramboer, 2020;Moreno & Coad, 2015). As Moreno and Coad (2015, p. 222) point out, 'regional economic performance may display persistence in a number of dimensions, such as infrastructure, cultural attitudes, and social institutions, that might lead some regions to consistently have higher HGF rates than others'.…”

Section: Discussionmentioning

confidence: 99%

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Knowledge Spillovers, Entrepreneurial Ecosystems and the Geography of High Growth Firms

Fotopoulos

2022

Entrepreneurship Theory and Practice

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Knowledge created outside the firm, but within the same region, is a key enabler of high-growth firms. This paper develops an entrepreneurial ecosystems conceptual framework focussing on knowledge spillovers and regional absorptive capacity, to account for interregional differences in high-growth firm rates. This is tested using panel data from 378 regions in Great Britain. Knowledge creation (SME-engaging and research-intensive universities, innovative firms) and knowledge spillovers (primarily through vertically related industries) reveal to be of key importance. Other key regional enablers of high growth firms pertain to entrepreneurship culture, talent, intermediate services, networks, finance and demand growth.

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Section: Discussionmentioning

confidence: 80%

Section: Discussionmentioning

confidence: 99%

Knowledge Spillovers, Entrepreneurial Ecosystems and the Geography of High Growth Firms

Fotopoulos

2022

Entrepreneurship Theory and Practice

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“…Unlike innovation, high growth is not cumulative but is vulnerable to random, difficult‐to‐predict events (S. O. Daunfeldt & Halvarsson, 2014; Moreno & Coad, 2015; Terjesen et al, 2016). Given high growth's low predictability, it is reasonable that external investors doubt government officials' ability to identify firms with high‐growth potential (Mason & Brown, 2013; Stevenson et al, 2021).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…Alternatively, governments have started establishing high‐growth (HG) subsidies dedicated to identifying and promoting high‐growth firms (Autio & Rannikko, 2016; Decramer & Vanormelingen, 2016; Mason & Brown, 2013; Mina, Minin, Martelli, Testa, & Santoleri, 2021). Nevertheless, compared to innovation, which is path dependent and cumulative, high growth is largely determined by random events and is difficult to predict and maintain (Moreno & Coad, 2015). Given the distinct nature of innovation and growth, R&D and HG subsidies may differ in the extent to which external investors believe in government officials' ability to ascertain entrepreneurial firms' true quality and subsequently influence investors' interpretations differently.…”

Section: Introductionmentioning

confidence: 99%

The signaling effect of entrepreneurship subsidies on initial public offering investor valuation: An anticorruption campaign as a quasi‐natural experiment

Jin

Heng

et al. 2023

Strategic Entrepreneurship

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Research SummaryThis study examines whether different entrepreneurship subsidies signal initial public offering (IPO) firms' quality to external investors. We employ a quasi‐natural experiment by exploiting the exogenous, staggered introduction of “Eight‐Point Code” inspections to Chinese provinces, which anticorruption campaign impacts how subsidies match firm quality. Based on a difference‐in‐differences analysis of 584 IPOs, we find that research and development (R&D) subsidies match highly innovative firms regardless of government corruption, but investors interpret R&D subsidies as a quality signal only when government corruption is low. High‐growth subsidies match high‐growth firms only when government corruption is low; however, investors do not interpret high‐growth subsidies as a quality signal regardless of government corruption. Our study contributes by examining subsidy–firm matching and investors' interpretations to isolate the signaling effect of entrepreneurship subsidies.Managerial SummaryDo initial public offering (IPO) investors interpret different entrepreneurship subsidies as signals of entrepreneurial firms' quality? We find that when government corruption is high, research and development (R&D) subsidies are matched to high‐quality firms, but high‐growth (HG) subsidies are not; nevertheless, because of dubious subsidy–firm matching under high corruption, neither R&D nor HG subsidies signal firm quality to IPO investors. When government corruption is low, both R&D and HG subsidies are matched to high‐quality firms; however, because of the distinct nature of innovation and growth, IPO investors interpret only R&D subsidies as a signal of quality, ignoring HG subsidies. Our findings suggest that investors' interpretations of entrepreneurship subsidies depend on subsidy type as well as subsidy–firm matching under different anticorruption regulations.

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“…While the case for a potential technological advantage is clearer in the FDI spillover case, HGFs may possess very relevant knowledge about technological, organizational, or marketing solutions which are crucial for operating more effectively in the specific context. While HGFs are no more common in innovative industries, HGFs are more innovative in their industry, which allows them to grow faster than their industry peers (Moreno and Coad 2015).…”

Section: Conceptual Frameworkmentioning

confidence: 99%

Spillovers from high growth firms: evidence from Hungary

2019

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How do high-growth firms (HGFs) affect the rest of the economy? We explore this question using Hungarian administrative microdata. Relying on the Birch definition of HGFs, we find evidence for stronger productivity growth for firms operating in industries with more HGFs and for firms supplying industries with more HGFs. Knowledge spillovers or the surge of HGFs' demand for intermediate inputs could explain these positive associations. Firms with intermediate productivity levels seem most likely to benefit from this effect, while we find no differences by age or export status. The results hold irrespective of the level of spatial aggregation and are robust to alternative definitions of HGFs as well as different measures of productivity or spillover.

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High-Growth Firms: Stylized Facts and Conflicting Results

Cited by 39 publications

References 68 publications

Knowledge Spillovers, Entrepreneurial Ecosystems and the Geography of High Growth Firms

Knowledge Spillovers, Entrepreneurial Ecosystems and the Geography of High Growth Firms

The signaling effect of entrepreneurship subsidies on initial public offering investor valuation: An anticorruption campaign as a quasi‐natural experiment

Spillovers from high growth firms: evidence from Hungary

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