Small Business Economics

, Volume 44, Issue 2, pp 361–383 | Cite as

Are high-growth firms one-hit wonders? Evidence from Sweden

  • Sven-Olov Daunfeldt
  • Daniel Halvarsson


Most firms do not grow, and a small number of high-growth firms seem to create most new jobs. These firms have therefore received increasing attention among policymakers. The question is whether high-growth tends to persist? We investigate this question using firm-level data from Sweden during 1997–2008. We find that high-growth firms had declining growth rates in the previous 3-year period, and their probability of repeating high growth rates was very low. Thus, these are essentially “one-hit wonders,” and it is doubtful whether policymakers can improve economic outcomes by targeting them.


Gazelles High-growth firms Growth persistence  Autocorrelation Transition probabilities 

JEL Classification

L11 L25 L26 



We would like to thank Mats Bergman, Pontus Braunerhjelm, Alex Coad, Hans Lööf, Björn Falkenhall, Rick Wicks, seminar participants at KTH Royal Institute of Technology, Ratio, Tillväxtanalys, and Umeå University, as well as two anonymous referees for valuable comments and suggestions. Ragnar Söderbergs Stiftelse is gratefully acknowledged for financial support, and Tillväxtanalys for providing data.


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Copyright information

© Springer Science+Business Media New York 2014

Authors and Affiliations

  1. 1.HUI ResearchStockholmSweden
  2. 2.Department of EconomicsDalarna UniversityBorlängeSweden
  3. 3.Division of EconomicsThe Royal Institute of TechnologyStockholmSweden
  4. 4.The Ratio InstituteStockholmSweden

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