Using the Eurostat-OECD Definition of High-Growth Firms: A Cautionary Note
Daunfeldt, Sven-Olov, Halvarsson, Daniel and Johansson, Dan (2015). Using the Eurostat-OECD Definition of High-Growth Firms: A Cautionary Note. Journal of Entrepreneurship and Public Policy, 4(1): 50–56.
Posted: 11 May 2021
Date Written: May 4, 2015
Purpose – High-growth firms (HGFs) have attracted an increasing amount of attention from researchers and policymakers, and the Eurostat-Organisation for Economic Co-operation and Development (OECD) definition of HGFs has become increasingly popular. The paper aims to discuss this issue.
Design/methodology/approach – The authors use a longitudinal firm-level data set to analyze the implications of using the Eurostat-OECD definition.
Findings – The results indicate that this definition excluded almost 95 percent of surviving firms in Sweden, and about 40 percent of new private jobs during 2005-2008.
Research limitations/implications – The proportion of small firms and their growth patterns differ across countries, and the authors therefore advise caution in using this definition in future studies.
Practical implications – Policy based on the Eurostat-OECD definition of HGFs might be misleading or even counterproductive.
Originality/value – No previous studies have analyzed the implications of using the Eurostat-OECD definition of HGFs.
Keywords: Industrial policy, Firm performance, Small to medium sized enterprises, Gazelles, High-growth firms
JEL Classification: L22, L25, L26
Suggested Citation: Suggested Citation