Working Paper No. 1062

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

Published: March 25, 2015Pages: 38Keywords: Entrepreneurship; Firm growth; Gazelles; High-growth firms; High-impact firms; Innovation; R&DJEL-codes: L11; L25
Published version

Are High-Growth Firms Overrepresented in High-Tech Industries? Sven-Olov Daunfeldt, Niklas Elert and Dan Johansson


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 4-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.

 

Niklas Elert

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Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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