What makes a high-growth firm? A dynamic probit analysis using Spanish firm-level data

López-García, Paloma; Puente, Sergio

doi:10.1007/s11187-011-9321-z

Cited by 110 publications

(48 citation statements)

References 18 publications

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“…In general, these studies have highlighted the significant capacity of HGFs, such as the youngest HGFs in Catalonia, to create employment (Hernández et al 1999;Amat et al 2010). López-García and Puente (2012) have noted that at the national level, fast-growing firms, categorised according to OECD indicators, created more than 250,000 net jobs within just 3 years. Moreover, these firms only represented the 1.5 % of the total population of firms.…”

Section: Introductionmentioning

confidence: 99%

High-growth firms: does location matter?

2016

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The challenge for economies lies in boosting employment growth, not just by fostering entrepreneurship, but also by improving the growth potential of existing firms. Consequently, many studies have focused on assessing the dynamism of firms, and especially the capacity of high-growth firms (HGFs) to generate employment. This study aimed to identify HGFs in Spain during two periods, 2003-2006 and 2007-2010 and to analyse their characteristics and territorial distribution during the initial years of the economic crisis. Accordingly, a key area of inquiry of the study was the influence of agglomeration (in metropolitan areas, industrial districts and technological districts) on the locations of HGFs. To analyse the influence of location on the probability of firms being HGFs, a logit model was estimated. The main results supported the study's hypotheses that technological districts and large urban areas are significantly associated with the probability of firms being HGFs, because firms profit from comparative locational advantages offered by these areas. The importance of HGFs requires special emphasis in relation to Spain's context of economic crisis and high unemployment levels because of their significant contribution to employment generation.

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Section: Introductionmentioning

confidence: 99%

High-growth firms: does location matter?

2016

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“…Indeed, there is emerging evidence of a shrinking in firm size, as measured by employment, across western economies, such as the United States, United Kingdom, France, Germany, and Italy, see Rosa and Hanoteau (2012) and Dosi et al (2008). Alas, recent work overemphasises fast growing firms (see Segarra and Teruel 2014;Arrigheti and Lasagni 2013;Lopez-Garcia and Puente 2012;Barringer, Jones and Neubaum 2005;Delmar, Davidsson and Gartner 2003;and Almus 2002), even though they are atypical. The typical with the trade-off relationship between size and performance to foster a sustained (but smallscale) existence of the firm.…”

Section: Introductionmentioning

confidence: 99%

Performance and Strategy: Simultaneous Equations Analysis of Long-lived Firms

Power

Reid

2015

International Journal of the Economics of Business

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A simultaneous equations model of performance, strategy and size is tested using fieldwork evidence on long-lived firms in Scotland. Estimation is by I3SLS, with correction for sample selection bias. The contributions of this paper are that it: (a) grounds estimation on fieldwork evidence; (b) calibrates performance and competitive strategy; (c) tests and models endogeneity; and (d) computes robust trade-off elasticities between firm size and performance. It shows how this trade-off provides the entrepreneur with two strong incentives: (i) to seek greater efficiency typically by an increase in the human capital of the 'core' workforce; (ii) to achieve higher levels of performance by adopting more diverse competitive strategies. AbstractA simultaneous equations model of performance, strategy and size is tested using fieldwork evidence on long-lived firms in Scotland. Estimation is by I3SLS, with correction for sample selection bias. The contributions of this paper are that it: (a) grounds estimation on fieldwork evidence; (b) calibrates performance and competitive strategy; (c) tests and models endogeneity; and (d) computes robust trade-off elasticities between firm size and performance. It shows how this trade-off provides the entrepreneur with two strong incentives: (i) to seek greater efficiency typically by an increase in the human capital of the 'core' workforce; (ii) to achieve higher levels of performance by adopting more diverse competitive strategies. JEL: C42, D21, G33, L2, M13, M21 firm achieves only moderate growth and often remains small (i.e. less than 50 employees: 2003/361/EC-definition), or even contracts. Though fast growing firms provide new employment in the small firm sector 1 , long-lived small firms provide continued employment in communities, and create positive externalities over time. Many barriers to growth of the small entrepreneurial firm (e.g. financial, motivational, organizational) have been identified (Coad and Tamvada 2012; Davidsson, Achtenhagen and Naldi 2010; Wiklund, Shin and Taejong 2003; Henrekeson and Johnsson 1999; and Heneman, Tanksy and Camp 2000) but further study is required of how they inhibit growth, see Barber, Metcalfe and Porteous (1989) and Petrakis (1997). Size has different significance for large compared to small firms. For example, Lee (2009) has found that for large publically traded US companies there is a positive relationship between size and performance. The importance of both initial start-up size (Mata and Portugal 1994; and Strotmann 2007) and current size (Mata, Portugal and Guimarães 1995) have been emphasised in studies of small firm survival and post-entry growth, yet the tendency for firms to remain small has been neglected.Contrary to Lee's (2009) findings for large firms, in small firms a control motive by the entrepreneur can limit output growth, denying the firm efficiency gains from growth. Given fixity of the entrepreneurial input, limits (e.g. of cognition) to the span of control encourage diminishing returns. This leads to a trade-off bet...

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“…In the group of structural factors affecting the development of an enterprise it is possible to distinguish: the industry in which the company operates (Becchetti & Trovato, 2002;Lopez-Garcia & Puente, 2012), the legal form of the company (Almus, 2002;Wyrwich, 2010), the region where it operates (Levratto et al, 2010).…”

Section: Literature Reviewmentioning

confidence: 99%

The Impact of Intangible Assets and R&D Expenditure on the Market Capitalization and EBITDA of Selected ICT Sector Enterprises in the European Union

Postuła¹,

Chmielewski²

2019

IJEF

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In the present paper, using the panel regression model with fixed effects, it was verified whether there is a relationship between intangible assets and R&D expenses on one side and the EBITDA level and market capitalization of 222 publicly listed companies from the Information and Communication Technology sector. Our research confirmed that in the group of companies from the ICT sector there is a medium of dependence of EBITDA on intangible assets and R&D expenditure.At the same time, at the level of the entire ICT sector, no relationship was found between the level of intangible assets and expenditures on research and development on the one hand, and the level of market capitalization of companies on the other. A similar lack of dependence was recorded in the ICT services and ICT manufacturing subsectors.In addition, there was a high correlation at the level of 74% between the level of intangible assets and R&D expenditure on the one hand and the EBITDA level obtained by companies from the ICT manufacturing sub-sector and the lack of such correlation in the ICT services sub-sector.Our research suggests that, in particular, the financial results of companies in the ICT sector may directly depend on the amount of expenses that companies incur in order to introduce new innovative solutions into their market offer.In the case of the European Union ICT sector, its Value Added (VA) amounted to 581 billion euros, it employed 5.8 million people and spent 30 billion euros on business enterprise expenditure on R&D (BERD). The ICT sector represented 3.9% of the EU value added, 2.5% of total employment, 15.7% of total BERD, and 18.6% and 20.6% of the R&D personnel and researchers in the EU, respectively.The growing importance of the ICT sector is linked to its better business indicators compared to other sectors of

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What makes a high-growth firm? A dynamic probit analysis using Spanish firm-level data

Cited by 110 publications

References 18 publications

High-growth firms: does location matter?

High-growth firms: does location matter?

Performance and Strategy: Simultaneous Equations Analysis of Long-lived Firms

The Impact of Intangible Assets and R&D Expenditure on the Market Capitalization and EBITDA of Selected ICT Sector Enterprises in the European Union

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