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

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  • Daunfeldt, Sven-Olov

    (HUI Research)

  • Halvarsson, Daniel

    (The Royal Institute of Technology, Division of Economics)

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 data on 432,689 observations in 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. HGFs are essentially “one-hit wonders”, and it is thus doubtful whether policymakers can improve economic outcomes by targeting them.

Suggested Citation

  • Daunfeldt, Sven-Olov & Halvarsson, Daniel, 2012. "Are high-growth firms one-hit wonders? Evidence from Sweden," HUI Working Papers 73, HUI Research.
    • Handle: RePEc:hhs:huiwps:0073
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    More about this item

    Keywords

    Gazelles; High-growth firms; Persistence; Autocorrelation; Transition Probabilities;
    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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