No. 147: Ownership and High-Growth Firms

Carl Magnus Bjuggren, Sven-Olov Daunfeldt och Dan Johansson

Abstract: Empirical studies demonstrate that most net job-growth originates from a small number of high-growth firms (HGFs). The purpose of this paper is to analyze whether firm ownership - family, or private non-family - matters for being a HGF, using data covering all firms in Sweden during 1993-2006. Firm growth is measured in terms of absolute employment growth, relative employment growth and as a combination of absolute and relative employment growth (the so-called Birch-index). We find that family ownership decreases the probability of exhibiting high growth. Changing ownership from family to private non-family increases the probability of being a HGF, whereas a change from private non-family to family ownership decreases the probability of being a HGF. The results are robust, irrespective of measurement of firm growth, suggesting that ownership and changes in ownership are important determinants of rapid firm growth.

Keywords: high-growth firms, gazelles, firm growth, firm ownership, family firms

JEL Classifications: D24; L25; L26

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