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 in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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