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High Growth Firms – A Sensitivity Analysis SWEDEN

High Growth Firms – A Sensitivity Analysis SWEDEN. Anita Du Rietz, Ministry of Enterprise, Energy and Communication Fredrik Andersson, Statistics Sweden. Definitions. High Growth firms: growth greater than 20% per annum, over a three year period, and with 10 or more employees .

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High Growth Firms – A Sensitivity Analysis SWEDEN

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  1. High Growth Firms – A Sensitivity AnalysisSWEDEN Anita Du Rietz, Ministry of Enterprise, Energy and Communication Fredrik Andersson, Statistics Sweden

  2. Definitions • High Growth firms: growth greater than 20% per annum, over a three year period, and with 10 or more employees . • Gazelles: high growth firms which at are no more than 5 years in the beginning of the observation period. • High Growth Firms = Gazelles + Flyers.

  3. Measuring high growth Selection variables • Two classes of variables: • employment a) number of employees b) wages/salaries, • economic performance a) turnover = sales b) value added

  4. Number of High Growth firms 2002-2005, (10+ empl. and +20%), in 2002. percentage of each category

  5. Number Employees in High Growth firms 02-05, (10+ empl. and +20%), in 2002. percentage of each category

  6. Selection variable – employment or economic performance? = new employees Economic performance Flyer Gazelles Time Time period of study

  7. The share of high growth firms, gazelles and flyers selection variable = employment, 1998-2005 0,60 0,50 0,40 HGE 0,30 GZE Flyers 0,20 0,10 0,00 Year 98 Year 99 Year 00 Year 01 Year 02 Year 03 Year 04 Year 05

  8. The share of high growth firms, gazelles and flyers selection variable = value added, 2000 - 2005 1,00 0,90 0,80 0,70 0,60 HGE Value Add 0,50 GZE Value Add Flyers Value Add 0,40 0,30 0,20 0,10 0,00 Year 00 Year 01 Year 02 Year 03 Year 04 Year 05

  9. Top Industries for gazelles NACE 74 Other business activities; Call centre activities - Provision of personnel activities - Construction and other engineering activities - Business and management consultancy activities - Advertising agency activities. 72 Computer and related activities Other software consultancy and supply - Hardware consultancy 45 Construction 51 Wholesales, trade & commission excl. motor veh. & cycle 85 Health and social work 52 Retail trade excl motor veh. & cycle; repair h/hold gds.

  10. Characteristics for high growth firms • they employ relatively younger people • they pay lower salaries to their employees • the young employees have higher education • key personal have a ph.d. in the age of 30-45 • the employees are to less extent on sick leave

  11. Age and gender, percentage within each type of firm 2005.

  12. Establishments – a better unit? - The dynamics of firms and enterprises - • Organic or non-organic growth, i.e., the entering point is via split/merge or “new” • Establishments are located in different regions or in industries • Regional clusters can be traced

  13. Establishment – a better unit? • 1.765 establishments are HGE • 1.091 firms with one establishment = HGE • 445 firms with several establishments that have in total 674 HGE • 129 of 445 firms are HGE in both methods • 488 establishments are HGE but these 316 firms are not HGE • More than 60% are in sections J+K, G+I

  14. Organic or non-organic gazelles

  15. High growth plants as a percentage share of all above 5 empl. 2002-2005.

  16. Sensitivity Analysis Gazelles of all surviving plants, %, 2002-2005, within size classes, growth rates = 10%, 20%, 30%.

  17. Summary - high growth - Sweden Choice of selection variables: economic performance = Gazelles ( 15%) + Flyers (5%) = All HG (7%) employment = Gazelles ( 9%) + Flyers (3%) = All HG (4%) Gazelles employ = young, more females, higher education, lower salaries

  18. Summary - high growth - Sweden Plants a better unit for employment analyses + 5 employees, +20% growth Gazelles overrepresented in service sectors, Flyers in a few sectors Sensitivity analysis for gazelle plants % of all plants with +5, 6,2% (+10% growth), 2,7% (+20% growth), 1,3% (+30% growth)

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