Using the eurostat-OECD definition of high-growth firms: a cautionary note

Abstract

Purpose – High-growth firms (HGFs) have attracted an increasing amount of attention from researchers and policymakers, and the Eurostat-Organisation for Economic Co-operation and Development (OECD) definition of HGFs has become increasingly popular. The paper aims to discuss this issue. Design/methodology/approach – The authors use a longitudinal firm-level data set to analyze the implications of using the Eurostat-OECD definition. Findings – The results indicate that this definition excluded almost 95 percent of surviving firms in Sweden, and about 40 percent of new private jobs during 2005-2008. Research limitations/implications – The proportion of small firms and their growth patterns differ across countries, and the authors therefore advise caution in using this definition in future studies. Practical implications – Policy based on the Eurostat-OECD definition of HGFs might be misleading or even counterproductive. Originality/value – No previous studies have analyzed the implications of using the Eurostat-OECD definition of HGFs.

Myth-busting and entrepreneurship policy: the case of high growth firms

“…Research has strongly corroborated the role of HGFs as job creators, with a meta-analysis of the empirical evidence base concluding that this is perhaps the most unambiguous finding across most of the high growth literature (Henrekson and Johansson 2010). There is now, however, evidence to suggest that employment effects from growth are less straightforward than previously assumed, particularly if acquisition is involved (Daunfeldt et al 2015a). According to observers, "at the macro level, growth by acquisition may simply 'transplant' jobs from a smaller firm into a larger acquiring firm, thus leading to net zero employment gain" (McKelvie and Wiklund 2010, 282).…”

Impact of high‐growth start‐ups on entrepreneurial environment based on the level of national economic development

“…Gazelles are the most dynamic sector of economy (Acs & Mueller, 2008) and are generally related to dynamic high-technology sectors (Daunfeldt, Johansson, & Halvarson, 2015;Dwyer & Kotey, 2016).…”

High-Growth Firms: Facts, Fiction, and Policy Options for Emerging Economies

“…On the contrary, evidence from developed countries suggest that HGFs are found in all sectors and in expanding industries with low mobility costs (Hölzl 2010;López-Garcia and Puente 2009;NESTA 2009). The literature survey by finds no evidence that HGFs are overrepresented in high-technology industries; if anything, these firms are overrepresented in services, especially the ones with high human capital and knowledge content (Autio, Sapienza, and Almeida 2000;Halabisky, Dreessen, and Parsley 2006;Delmar, Davidsson, and Gartner 2003;Davidsson and Delmar 2006;Daunfeldt, Johansson, and Halvarsson 2015). In the United States, the relationship between sectors with large incidence of HGFs and sectors that are generally perceived as more dynamic is not fully intuitive; for example, the construction sector has a particularly high output share accounted for by HGFs, whereas in biotech industries the shares of employment and output attributable to HGFs are no different from the average for the United States .…”

“…Similarly, a study of Finnish gazelles-firms that experienced sales growth of at least 50 percent during three consecutive years-finds that high-technology firms were not overrepresented in the gazelle population during 1994-97 (Autio, Sapienza, and Almeida 2000). And in Sweden, Daunfeldt, Johansson, and Halvarsson (2015) suggest that higher R&D intensity may even imply a smaller share of HGFs in the industry. In the United States (state of Georgia), find relatively higher prevalence of high-growth start-ups in manufacturing and management consulting firms, although wholesale trade; professional, scientific, and technical services; and construction have higher absolute numbers of HGFs.…”