Journal Article

Are high-growth firms overrepresented in high-tech industries?

Sven-Olov Daunfeldt, Niklas Elert and Dan Johansson

in Industrial and Corporate Change

Volume 25, issue 1, pages 1-21
Published in print February 2016 | ISSN: 0960-6491
Published online June 2015 | e-ISSN: 1464-3650 | DOI: https://dx.doi.org/10.1093/icc/dtv035
Are high-growth firms overrepresented in high-tech industries?

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  • Industrial History
  • Business History
  • Innovation
  • Technological Change; Research and Development
  • Industry Studies

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It is frequently argued that policymakers should target high-tech firms, i.e., firms with high R&D intensity, because such firms are considered more innovative and therefore potential fast-growers. This argument relies on the assumption that the association among high-tech status, innovativeness, and growth is actually positive. We examine this assumption by studying the industry distribution of high-growth firms (HGFs) across all four-digit NACE industries, using data covering all limited liability firms in Sweden during the period 1997–2008. The results of fractional logit regressions indicate that industries with high R&D intensity, ceteris paribus, can be expected to have a lower share of HGFs than can industries with lower R&D intensity. The findings cast doubt on the wisdom of targeting R&D industries or subsidizing R&D to promote firm growth. In contrast, we find that HGFs are overrepresented in knowledge-intensive service industries, i.e., service industries with a high share of human capital.

Keywords: L11; L25

Journal Article.  12644 words. 

Subjects: Industrial History ; Business History ; Innovation ; Technological Change; Research and Development ; Industry Studies

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