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Profile of High-growth Firms and Gazelles in the U.S.

Profile of High-growth Firms and Gazelles in the U.S. Richard L. Clayton, Akbar Sadeghi, David Talan Bureau of Labor Statistics November 19, 2007. Caveats. The data on high-growth and gazelles are preliminary research data subject to change for methodology update and data revisions.

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Profile of High-growth Firms and Gazelles in the U.S.

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  1. Profile of High-growth Firms and Gazelles in the U.S. Richard L. Clayton, Akbar Sadeghi, David Talan Bureau of Labor Statistics November 19, 2007

  2. Caveats • The data on high-growth and gazelles are preliminary research data subject to change for methodology update and data revisions.

  3. Methodology • High-growth and gazelles data are only a snapshot of expanding firms at the end of 2006 aimed at understanding the methodological issues.

  4. Methodology (cont.) • High-growth industries and gazelles were calculated at the firm level. • Firms were identified by employers’ federal tax identification numbers. • Employment was aggregated for multi establishment firms that have the same employer identification numbers.

  5. Methodology (cont.) • The age of the oldest member of multi establishment firms was selected as the firm age. • For the sensitivity analysis, high-growth firms employment was estimated based on 15, 20, 25, 30 and 40 percent annual growth over a three year period.

  6. Time Frame for Analysis • The selected time period was from fourth quarter 2003 to fourth quarter 2006. • Gazelles are a subset of high-growth firms with less than five years in business in the beginning of the three-year time period. • Alternatively, five-year-in-business constraint could be applied to the end of the three-year growth requirement.

  7. Age Estimates • Age estimates are based on firm birth date, which is defined as the date of first quarterly positive employment. • The date of first positive employment is assigned in the longitudinal database where no employment or zero employment for four consecutive quarters led to the positive employment.

  8. Definition of Births • This definition of birth excludes the seasonal businesses but includes reactivating businesses if the reactivation occurred after more than five quarters of inactivity.

  9. Analysis • For comparison, 20 percent (the basic definition) and 40 percent (the highest growth suggested) are tabulated together in the same tables (Tables 1a-4a). • Other growth rates are displayed in separate tables (Tables 1b-4b).

  10. Summary The results clearly show the status and ranking of industries based on presence and the number of firms and employment of firms with high-growth and gazelles status. It appears that the rankings both in employment and the count of firms are to a small extent sensitive to the defined rate of growth.

  11. Future Work • Time Series Data • The same numbers in different time intervals or preferably a time series of such data will show the dynamics of growth across industries and regions • Size Class Data • Methodological Issues • Base Size Method • Age data might be more useful

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