Are high-growth firms one-hit wonders? Evidence from Sweden

  • Daunfeldt S
  • Halvarsson D
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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 firm-level data from 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. Thus, these are essentially ''one-hit wonders,'' and it is doubtful whether policymakers can improve economic outcomes by targeting them.

Author-supplied keywords

  • Autocorrelation
  • Gazelles
  • Growth persistence
  • High-growth firms
  • Transition probabilities

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  • Sven Olov Daunfeldt

  • Daniel Halvarsson

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