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Using the eurostat-OECD definition of high-growth firms

PublicationArticle (with peer review)
Dan Johansson, Daniel Halvarsson, Företagandets villkor, Gaseller, High-growth firms, High-impact firms, OECD, Snabbväxande företag, Sven-Olov Daunfeldt

Abstract

Recent studies have suggested that most firms do not grow, and that a small number of high-growth firms create most new jobs. High-growth firms have therefore attracted an increasing amount of attention from researchers and policymakers. However, there is no uniform definition of what constitutes a high-growth firm in the literature. Eurostat and the Organisation for Economic Co-operation and Development (OECD) recently recommended that high-growth firms should be defined as firms with at least ten employees in the start-year and annualized employment (or sales) growth exceeding 20% during a 3-year period. This definition would exclude almost 95% of surviving firms in Sweden and about 40% of new private jobs during 2005-2008. We therefore advise caution in using this definition.

Daunfeldt, S-O., Johansson, D. & Halvarsson, D. (2015). Using the eurostat-OECD definition of high-growth firms: a cautionary note. Journal of Entrepreneurship and Public Policy, 4(1), 50-56. DOI: 10.1108/JEPP-05-2013-0020


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