Working Paper No. 1210

Getting the Facts Right on Born Globals

Published: May 3, 2018, revised September 2018, January 2019 and May 19Pages: 29Keywords: Born globals; Exporting; Firm growth; Globalization; Job creationJEL-codes: F14; F23; L25; M13

Getting the Facts Right on Born Globals Shon Ferguson, Magnus Henrekson and Louise Johannesson


Policymakers in several countries have recently taken steps to promote the rapid export expansion of small- and medium-sized enterprises (SMEs). The goal of these policies has been to create successful export-intensive startups, which are often referred to as born globals. These measures are motivated by studies claiming that born global firms are disproportionately important for job creation and economic growth.

Using detailed register data on the universe of Swedish manufacturing startups founded 1998–2011, we find that born globals are a very small group of firms whose long-run size and growth do not outperform other exporting firms. We also show that removing continuing firms and spinouts from the analysis is crucial for obtaining correct results. Thus, the notion that born globals are superior to firms that follow a more gradual internationalization process, a conclusion largely based on case studies and surveys, does not withstand scrutiny. Policymakers must therefore be aware that encouraging more born globals need not necessarily lead to large benefits for the overall economy, especially in terms of employment.

 

 

 

Interdisciplinary European Studies

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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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