2014/11 | LEM Working Paper Series | |
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What does (not) determine persistent corporate high-growth ?
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Stefano Bianchini, Giulio Bottazzi, Federico Tamagni |
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Keywords | ||
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High-growth firms, Persistent high-growth, Productivity, Firm age, Firm size
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JEL Classifications | ||
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D22, D24, L26
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Abstract | ||
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Theoretical and empirical studies of industry dynamics have
extensively focused on the process of growth. Theory predicts
production efficiency, profitability and financial status as the
central channels through which firms can survive, grow and eventually
achieve out- standing growth performance. Does the same conceptual
framework provide a convincing explanation of persistent corporate
high-growth? Exploiting panels of Italian, Spanish, French and UK
firms we find no evidence that this is the case: companies
experiencing persistent high growth are not more productive nor more
profitable, and do not display peculiarly different financial
conditions than firms that only exhibit high, but not persis- tent,
growth performance. The finding is robust across countries, across
manufacturing and services, and also controlling for firm innovation,
age and size.
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