Details

Eva Christine Erhardt
Wie entwickeln sich Wachstumsunternehmen weiter? Eine Analyse auf Basis verschiedener Wachstumsdefinitionen (Firm Performance After High Growth. A Comparison of Absolute and Relative Growth Measures)
in: Lectures "WIFO-Extern"
Vortrag, Österreichisches Institut für Wirtschaftsforschung, Wien, 22.03.2018
Online since: 15.02.2018 0:00
Do high-growth firms continue to create jobs after the high-growth period or is high growth a one-time event? Does the answer to this question depend on the definition of high growth? This paper analyses data from Amadeus on Bulgarian firms for three consecutive 3-year periods (2001-2004, 2004-2007, and 2007-2010). Previously, high growth has been defined in terms of relative growth or composite measures such as recommended by Eurostat and OECD. We additionally apply an absolute measure of growth, i.e., the actual change in headcount. Using a two-part model with separate equations for survival and growth, we moreover specifically account for the impact of firm exits on aggregate effects. We find that definitions are central for outcomes. In terms of relative and Eurostat-OECD high growth our results for Bulgarian firms largely confirm what has been found for high-income countries: surviving relative high-growth firms are characterised by negative future development. High growth firms defined according to Eurostat-OECD continue to grow after high growth. If growth is measured in absolute terms, then high-growth firms only continue to create more jobs than non-high growth firms as far as surviving firms are concerned. Taking firm exits into account, absolute high-growth firms are outperformed by average firms due to the job losses of large exiting high-growth firms – with one notable exception: absolute high-growth firms of initially small size (10 to 49 employees) continue to grow faster than other firms even if exits are accounted for and indeed seem a worthwhile target for policies promoting high-growth entrepreneurship.
Keywords:TP_Wettbewerbsfaehigkeit, Überleben, Wachstumspolitik, Unternehmenspolitik, Beschäftigung, Wachstumsunternehmen
Research group:Industrial Economics, Innovation and International Competition
Language:German

Firm Performance After High Growth. A Comparison of Absolute and Relative Growth Measuresin: Lectures "WIFO-Extern"
Do high-growth firms continue to create jobs after the high-growth period or is high growth a one-time event? Does the answer to this question depend on the definition of high growth? This paper analyses data from Amadeus on Bulgarian firms for three consecutive 3-year periods (2001-2004, 2004-2007, and 2007-2010). Previously, high growth has been defined in terms of relative growth or composite measures such as recommended by Eurostat and OECD. We additionally apply an absolute measure of growth, i.e., the actual change in headcount. Using a two-part model with separate equations for survival and growth, we moreover specifically account for the impact of firm exits on aggregate effects. We find that definitions are central for outcomes. In terms of relative and Eurostat-OECD high growth our results for Bulgarian firms largely confirm what has been found for high-income countries: surviving relative high-growth firms are characterised by negative future development. High growth firms defined according to Eurostat-OECD continue to grow after high growth. If growth is measured in absolute terms, then high-growth firms only continue to create more jobs than non-high growth firms as far as surviving firms are concerned. Taking firm exits into account, absolute high-growth firms are outperformed by average firms due to the job losses of large exiting high-growth firms – with one notable exception: absolute high-growth firms of initially small size (10 to 49 employees) continue to grow faster than other firms even if exits are accounted for and indeed seem a worthwhile target for policies promoting high-growth entrepreneurship.