High-tech gazelle firms at various stages of evolution: performance and distinctive features

Abstract

Purpose The purpose of this study is the detection and comparison of distinctive features of Gazelle firms (GFs) at three stages evolution outside the typical boundaries.Design/methodology/approach The study uses Analysis of Variance and logistic regression to tests the performance of 2427 gazelles for (GFs) a five-year period (2015–2020).Findings The study found that GFs prediction probability is low. In their second and third stages of evolution (initial growth and continuing growth), the gazelle growth effects appear. They are more effective in terms of profitability and turnover due to increasing sales and size.Practical implications This study shows that stakeholders should give preference to GFs that demonstrate long-term (steady) growth. Such firms are more efficient and financially stable than firms with high short-term growth.Originality/value The present study identifies patterns in the generation and development of GFs in high-tech industries outside the typical boundaries.

Pathways to Prosperity: Navigating Post-Stagnation Growth and Revitalizing Business

“…Scholars frequently associate rapid growth with new ventures, noting that growth typically slows over time, potentially leading to prolonged periods of subdued dynamics, stagnation, or declines in sales and production (Evans 1987). The extensive literature on fast-growing firms, particularly gazelles (Coad and Srhoj 2019;Grover Goswami et al 2019;Spitsin et al 2023aSpitsin et al , 2023b, offers an in-depth exploration of growth factors across diverse geographical regions and economic sectors. Gazelle companies are commonly identified among younger enterprises (Henrekson and Johansson 2010), with research focusing on how certain factors, such as venture capital, may enhance growth trajectories, leading to significant liquidity events like initial public offerings (Aldrich and Ruef 2018).…”

“…To accurately discern and scrutinize 'growth firms', it becomes imperative to consider growth variation and mitigate the impact of elevated one-year growth spurts. A range of strategies may be deployed to tackle this issue, encompassing the adoption of the geometric average of sales growth over multiple years (OECD 2008) and the incorporation of the normalized beta coefficient in the sales growth trend equation for the designated period (Spitsin et al 2023b).…”

“…Nonetheless, the coefficient of variation functions as a parametric feature of the sample and attains optimal efficacy when the sample is both substantial in size and adheres to the normal distribution law. Given the common non-compliance of these conditions in the context of rapidly growing firms, empirical confirmation is warranted to establish the appropriateness of deploying the coefficient of variation (Spitsin et al 2023b).…”

“…Several studies opt not to grapple with this predicament, choosing instead to examine cumulative sales growth over successive years, effectively amalgamating 'growth firms' and 'growth episodes' (Coad and Srhoj 2019;Chae 2023). This approach, however, elicits controversy, given previous research findings indicating that entities exhibiting sustained, long-term growth (annual sales growth) possess distinct advantages over those characterized by sporadic, yet robust, sales growth (Spitsin et al 2023b).…”

“…While both extremes present scientific interest, the future trajectory of an industry arguably depends more on those entities that achieve abnormally high growth rates through qualitative leaps. These entities are identified as 'growth companies', 'gazelles', and 'scale-ups' (Savin and Novitskaya 2023;Spitsin et al 2023b;Tomenendal et al 2022). High growth in indicators over a specific period may be attributed to external circumstances; however, consistent high growth across multiple periods, particularly post the low base effect, warrants focused investigation.…”