Working Paper No. 197. Are high-growth firms one-hit wonders?

Most firms do not grow, and a small number of high-growth firms seem to create most new jobs. These firms have therefore received increasing attention among policymakers. The question is whether high-growth tends to persist? We investigate this question using data on 432,689 observations in Sweden during 1997-2008. We find that high-growth firms had declining growth rates in the previous 3-year period, and their probability of repeating high growth rates was very low. HGFs are essentially “one-hit wonders”, and it is thus doubtful whether policymakers can improve economic outcomes by targeting them.

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Daunfeldt, S-O. & Halvarsson, D. (2012). Are high-growth firms one-hit wonders? Evidence from Sweden. Ratio Working Paper No. 197.