2016

Are High-Growth Firms Overrepresented in High-Tech Industries?

Reprint No. 2016:6

Author(s): Sven-Olov Daunfeldt, Niklas Elert and Dan JohanssonYear: 2016 Title: Industrial and Corporate Change Volume (No.): 25 (1) Pages: 1–21
Online article (restrictions may apply)
Preliminary version


It is frequently argued that policymakers should target high-tech firms, i.e., firms with high R&D intensity, because such firms are considered more innovative and therefore potential fast-growers. This argument relies on the assumption that the association among high-tech status, innovativeness, and growth is actually positive. We examine this assumption by studying the industry distribution of high-growth firms (HGFs) across all four-digit NACE industries, using data covering all limited liability firms in Sweden during the period 1997–2008. The results of fractional logit regressions indicate that industries with high R&D intensity, ceteris paribus, can be expected to have a lower share of HGFs than can industries with lower R&D intensity. The findings cast doubt on the wisdom of targeting R&D industries or subsidizing R&D to promote firm growth. In contrast, we find that HGFs are overrepresented in knowledge-intensive service industries, i.e., service industries with a high share of human capital.


Reference:
Daunfeldt, Sven-Olov, Niklas Elert and Dan Johansson (2016), "Are High-Growth Firms Overrepresented in High-Tech Industries?". Industrial and Corporate Change 25(1), 1–21.

Niklas Elert

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Ph: +46 8 665 4583
niklas.elert@ifn.se

An Agenda for Europe

Institutional Reform for Innovation and Entrepreneurship

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The authors of this book, Niklas Elert, Magnus Henrekson and Mikael Stenkula, advise the economies of the European Union to become more entrepreneurial in promoting innovation and economic growth. The authors propose a reform strategy with respect to several aspects to achieve this goal.

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