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High Growth Firms and Job Creation in Finland

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  • Deschryvere, Matthias

Abstract

The goal of this descriptive paper is to identify which firms add the most employment in Finland. The analysis is based on firm and establishment data from the Finnish Business Register (period 20032006). It is found that in 2006 Finland had 750 High Growth Firms (according to the OECD-definition). This represents roughly 5% of the firms with at least 10 employees. As growth has a multi-facetted nature it is crucial to not only focus on how much a firm grows but also how it grows. Not all of those 750 HGFs grew organically. In fact, of all the jobs they created 65% turned out to be organic employment. There seems to be a positive relationship between the initial size of a HGF and what proportion of the employment is acquired. Correcting for acquisition growth leaves us with 642 organic HGFs. The share of HGFs was the highest in the sectors other business activities, computer and related activities and health and social work. It does look like a substantial number of HGFs have been expanding due to trends in domestic outsourcing. Future research should focus on the causes and consequences of the expansion of those firms. Firm group information should be used as to be able to better capture shifts of employment between firms of the same group.

Suggested Citation

  • Deschryvere, Matthias, 2008. "High Growth Firms and Job Creation in Finland," Discussion Papers 1144, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:dpaper:1144
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    References listed on IDEAS

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    Cited by:

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    2. Dan Johansson & Sven-Olov Daunfeldt, 2011. "What explains the presence of High-growth firms in industries?," ERSA conference papers ersa10p1500, European Regional Science Association.
    3. González-Uribe, Juanita & Reyes, Santiago, 2021. "Identifying and boosting “Gazelles”: Evidence from business accelerators," Journal of Financial Economics, Elsevier, vol. 139(1), pages 260-287.
    4. Daunfeldt, Sven-Olov & Elert, Niklas & Johansson, Dan, 2010. "The Economic Contribution of High-Growth Firms: Do Definitions Matter?," Ratio Working Papers 151, The Ratio Institute.
    5. Sven-Olov Daunfeldt & Niklas Elert & Dan Johansson, 2016. "Are high-growth firms overrepresented in high-tech industries?," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(1), pages 1-21.
    6. Magnus Henrekson & Dan Johansson, 2010. "Gazelles as job creators: a survey and interpretation of the evidence," Small Business Economics, Springer, vol. 35(2), pages 227-244, September.
    7. Sven-Olov Daunfeldt & Niklas Elert & Dan Johansson, 2014. "The Economic Contribution of High-Growth Firms: Do Policy Implications Depend on the Choice of Growth Indicator?," Journal of Industry, Competition and Trade, Springer, vol. 14(3), pages 337-365, September.
    8. Maliranta, Mika & Nikulainen, Tuomo, 2008. "Labour Force Paths as Industry Linkages: A Perspective on Clusters and Industry Life Cycles," Discussion Papers 1168, The Research Institute of the Finnish Economy.
    9. Mainela, Tuija & Puhakka, Vesa & Sipola, Sakari, 2018. "International entrepreneurship beyond individuals and firms: On the systemic nature of international opportunities," Journal of Business Venturing, Elsevier, vol. 33(4), pages 534-550.
    10. Stefan Fölster & Li Jansson & Anton Nyrenström Gidehag, 2016. "The effect of local business climate on employment," Journal of Entrepreneurship and Public Policy, Emerald Group Publishing Limited, vol. 5(1), pages 2-24, April.
    11. Besnik A. Krasniqi & Sameeksha Desai, 2016. "Institutional drivers of high-growth firms: country-level evidence from 26 transition economies," Small Business Economics, Springer, vol. 47(4), pages 1075-1094, December.
    12. Gonzalez-Uribe, Juanita & Reyes, Santiago, 2021. "Identifying and boosting “gazelles”: evidence from business accelerators," LSE Research Online Documents on Economics 103145, London School of Economics and Political Science, LSE Library.
    13. Jun Du & Yama Temouri, 2015. "High-growth firms and productivity: evidence from the United Kingdom," Small Business Economics, Springer, vol. 44(1), pages 123-143, January.
    14. Colin Mason & Ross Brown, 2013. "Creating good public policy to support high-growth firms," Small Business Economics, Springer, vol. 40(2), pages 211-225, February.
    15. Fornaro, Paolo & Luomaranta, Henri, 2017. "Small and Medium Firms, Aggregate Productivity and the Role of Dependencies," ETLA Working Papers 47, The Research Institute of the Finnish Economy.
    16. Yudanov, A., 2010. "Embodiments of Entrepreneurial Spirit: «Gazelle-Firms» in Russia," Journal of the New Economic Association, New Economic Association, issue 5, pages 92-109.
    17. Sven-Olov Daunfeldt & Niklas Elert & Dan Johansson, 2011. "Industrial Variation of High-Growth Firms," ERSA conference papers ersa10p1658, European Regional Science Association.
    18. Cristina Guillamón & Enrique Moral-Benito & Sergio Puente, 2017. "High growth firms in employment and productivity: dynamic interactions and the role of financial constraints?," Working Papers 1718, Banco de España.

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    More about this item

    Keywords

    firm growth; high growth firms; job creation; growth patterns;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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