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

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  • Sven-Olov Daunfeldt
  • Daniel Halvarsson

Abstract

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 firm-level data from 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. Thus, these are essentially “one-hit wonders,” and it is doubtful whether policymakers can improve economic outcomes by targeting them. Copyright Springer Science+Business Media New York 2015

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  • Sven-Olov Daunfeldt & Daniel Halvarsson, 2015. "Are high-growth firms one-hit wonders? Evidence from Sweden," Small Business Economics, Springer, vol. 44(2), pages 361-383, February.
    • Handle: RePEc:kap:sbusec:v:44:y:2015:i:2:p:361-383
    DOI: 10.1007/s11187-014-9599-8
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    More about this item

    Keywords

    Gazelles; High-growth firms; Growth persistence ; Autocorrelation; Transition probabilities; L11; L25; L26;
    All these keywords.

    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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