Does high growth persist? A focus on growth formulas and the influence of firm exits

Konferenzbeitrag

This study investigates the development of firms after high-growth. We argue that the formula used for measuring growth determines results. Implications from different formulas are tested with data from Amadeus on Bulgarian firms for the years 2001-2010. We provide first evidence for an absolute growth formula and its systematic comparison to alternative choices. The focus is on growth in employees, but we offer additional evidence for sales and profits. Using a two-part regression model with separate equations for survival and growth, we find that high-growth does not persist when size of exits is accounted for. Losses by exiting high-growth firms outweigh further gains in size by survivors. This result equally holds for the 1 percent fastest growers in absolute terms, the top 1 percent in terms of log growth and high-growth firms defined according to Eurostat-OECD. Implications for the future study of high-growth firms and policies focused at them are discussed.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Beiträge zur Jahrestagung des Vereins für Socialpolitik 2018: Digitale Wirtschaft - Session: Business Economics II ; No. E07-V3

Classification and Topics

• Classification: Wirtschaft ; Entrepreneurship ; Labor Demand ; Methodological Issues: General ; Firm Behavior: Empirical Analysis ; Socialist Systems and Transitional Economies: Factor and Product Markets; Industry Studies; Population ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Firm Performance: Size, Diversification, and Scope ; Firm Behavior: Empirical Analysis ; Methodological Issues: General ; Socialist Systems and Transitional Economies: Factor and Product Markets; Industry Studies; Population
• Subject: high-growth firms ; persistence ; growth formulas ; firm size ; firm exit

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Erhardt, Eva
• Event: Veröffentlichung
• (who): ZBW - Leibniz-Informationszentrum Wirtschaft
• (where): Kiel, Hamburg
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/181595
• Last update: 10.03.2025, 11:42 AM CET