High-growth firms and productivity: evidence from the United Kingdom

Research output: Contribution to journalArticle

Abstract

Abstract There is considerable evidence that high-growth firms (HGFs) contribute significantly to employment and economic growth. However, the literature so far does not adequately explore the link between HGFs and productivity. This paper investigates the empirical link between total factor productivity (TFP) growth and HGFs, defined in terms of sales growth, in the United Kingdom over the period 2001-2010, by examining two related research questions. Firstly, does higher TFP growth lead to HGF status and secondly, does HGF experience help firms achieve faster TFP growth? Our findings reveal that firms in both the manufacturing and services sectors are more likely to become HGFs when they exhibit higher TFP growth. In addition, firms that have had HGF experience tend to enjoy faster TFP growth following the high-growth episodes. Policy implications are drawn based on the self-reinforcing process of the high-growth phenomenon that is revealed by our results.
Original languageEnglish
Pages (from-to)123-143
Number of pages21
JournalSmall Business Economics
Volume44
Issue number1
Early online date17 May 2014
DOIs
Publication statusPublished - Jan 2015

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Productivity
High-growth firms
Total factor productivity growth
Policy implications
Economic growth
Service sector
Manufacturing sector
Employment growth
Sales growth

Bibliographical note

This article is distributed under the terms of the Creative Commons Attribution License (CC-BY) which permits any use, distribution, and reproduction in any medium, provided the original author(s) and the source are credited.

Research funder: ESRC/NESTA.

Electronic supplementary material: doi: 10.1007/s11187-014-9584-2).

Keywords

  • firm growth
  • high-growth firms
  • productivity

Cite this

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High-growth firms and productivity : evidence from the United Kingdom. / Du, Jun; Temouri, Yama.

In: Small Business Economics, Vol. 44, No. 1, 01.2015, p. 123-143.

Research output: Contribution to journalArticle

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