The Economic Contribution of High-Growth Firms: Do Definitions Matter?

Prior studies have defined high-growth firms (HGFs) in terms of sales or employment, and analyzed their contribution to employment growth. We define HGFs by employment and sales and add definitions of value added and productivity. We examine the contribution of HGFs to employment growth, economic growth, productivity growth, and sales growth. All HGFs give a disproportionately large positive contribution to economic growth and most also give large positive contributions to growth in employment, productivity and sales. Although HGFs of different definitions are usually not the same firms, young firms are more likely to be HGFs irrespective of definition.Gazelles; Firm growth; High-impact firms

When is Gibrat's Law a Law?

The purpose of this paper is to investigate if the industry context matters for whether Gibrat's law is rejected or not using a dataset that consists of all limited firms in 5-digit NACE-industries in Sweden during 1998-2004. The results reject Gibrat's law on an aggregate level, since small firms grow faster than large firms. However, Gibrat's law is confirmed about as often as it is rejected when industry-specific regressions are estimated. It is also found that the industry context - e.g., minimum efficient scale, market concentration rate, and number of young firms in the industry - matters for whether Gibrat's law is rejected or not.Firm growth; firm size; job creation; small firms

Nanoscale Molecular Dynamics Simulaton of Shock Compression of Silicon

We report results of molecular dynamics simulation of shock wave propagation in silicon in [100], [110], and [111] directions obtained using a classical environment-dependent interatomic potential (EDIP). Several regimes of materials response are classified as a function of shock wave intensity using the calculated shock Hugoniot. Shock wave structure in [100] and [111] directions exhibit usual evolution as a function of piston velocity. At piston velocities km/s the shock wave consists of a fast elastic precursor followed by a slower plastic front. At larger piston velocities the single overdriven plastic wave propagates through the crystal causing amorphitization of Si. However, the [110] shock wave exhibits an anomalous materials response at intermediate piston velocities around km/s which is characterized by the absence of plastic deformations

When is Gibrat's Law a Law?

The purpose of this paper is to investigate if the industry context matters for whether Gibrat's law is rejected or not using a dataset that consists of all limited firms in 5-digit NACE-industries in Sweden during 1998-2004. The results reject Gibrat's law on an aggregate level, since small firms grow faster than large firms. However, Gibrat's law is confirmed about as often as it is rejected when industry-specific regressions are estimated. It is also found that the industry context - e.g., minimum e¢ cient scale, market concentration rate, and number of young firms in the industry - matters for whether Gibrat's law is rejected or not.Firm growth; firm size; job creation; small firms

Evasive Entrepreneurship and Institutional Change

In this paper, we argue that evasive entrepreneurship is an important source of innovation in the economy. Institutions may prevent or raise the cost of exploiting business opportunities, which can trigger evasive behavior because an entrepreneur may earn large rents by circumventing institutional impediments. Paradoxically, institutions may be less of a constraint for entrepreneurs than for other economic agents because entrepreneurs may be better able to evade them. Although evasive entrepreneurship can be both productive and unproductive/destructive, its dynamic character is more important because evasive entrepreneurship may be able to prevent economic development from being stifled by existing institutions during times of rapid economic change. Furthermore, if evasive entrepreneurship becomes sufficiently widespread and economically important, it may trigger a response from lawmakers and regulators, leading to institutional change with potentially important welfare implications. We illustrate this thesis by considering a number of real-word examples of evasive entrepreneurship

The economic contribution of high-growth firms: Do definitions matter?

Prior studies have defined high-growth firms (HGFs) in terms of sales or employment, and analyzed their contribution to employment growth. We define HGFs by employment and sales and add definitions of value added and productivity. We examine the contribution of HGFs to employment growth, economic growth, productivity growth, and sales growth. All HGFs give a disproportionately large positive contribution to economic growth and most also give large positive contributions to growth in employment, productivity and sales. Although HGFs of different definitions are usually not the same firms, young firms are more likely to be HGFs irrespective of definition.Gazelles; Firm growth; High-impact firms

Łukasz MUSIAŁ Arkadiusz ŻYCHLIŃSKI (red.), Nienasycenie. Filozofowie o Kafce

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Does Social Cohesion Really Promote Reforms?

This paper investigates whether social cohesion makes economic reforms more likely. First, we investigated whether social cohesion is a coherent concept by using a principal-component factor (PCF) analysis covering 16 indicators used to measure social cohesion in the previous literature for 40 different countries. The results suggested that in fact social cohesion is a multidimensional concept, consisting of no less than five orthogonal components or distinct dimensions, which we labeled social divisions, modern values, traditional nationalism, institutional commitment, and fairness as merit. The dimensions are then examined in relationship with economic reform in a panel regression framework. Results show that most dimensions of social cohesion do not in fact influence reform capacity. However, views of fairness based on merit, in contrast to equality, and to some extent social divisions, are found to have a positive effect on economic reforms. The results go against the previous literature, challenging the prevailing view of social cohesion as being unambiguously beneficial to economic reform

Industrial Variation of High-Growth Firms

Previous examinations of the literature suggests that high-growth firms (HGFs) exist in all or most industries, are not overrepresented in high-tech, and if anything appear to be slightly overrepresented in services. In an updated overview, we find that more recent studies, employing better statistical methods, show a clear link between technological sophistication and HGFs. In a tobit model we examine what factors explain the presence of HGFs across 5-digit-NACE-industries in Sweden 1997-2005. We find that technological sophistication is crucial for the prevalence of HGFs in an industry, particularly in services. These results are in line with both current research and previous research concerning Sweden. We conclude that innovation is crucial for firm growth