Young Innovative Companies: The New High-Growth Firms?

KU Leuven - Department of Managerial Economics, Strategy and Innovation, OR 1208

32 Pages Posted: 11 Jan 2013

See all articles by Dirk Czarnitzki

Dirk Czarnitzki

KU Leuven - Department of Managerial Economics, Strategy, and Innovation; Centre for European Economic Research (ZEW)

Julie Delanote

KU Leuven - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 1, 2012

Abstract

Young Innovative Companies (YIC) gained increasing attention from governments and scholars due to their expected high innovative performance and growth. Consequently, this study investigates whether Young Innovative Companies, as defined by the EU, grow more than other firms, both in terms of employment and in terms of sales. Using a database of Flemish firms over the years 2001-2008 reveals that these firms do grow significantly more than other firms. In addition, this study shows that YICs can be differentiated from New Technology Based Firms and small young firms in terms of growth, pointing to the importance of combining the individual properties characterizing YICs, that is being young (<6 years), small (<250 employees) and R&D intensive (R&D intensity > 15%). In our estimations, we also take the underlying distribution of the growth variables into account by performing quantile regressions. The results of these quantile regressions reveal that YICs especially grow faster than the other, already fast-growing firms, indicating that they are high performers. In addition, we never find that these companies perform significantly worse than the other firms.

Keywords: Young Innovative Companies, Growth

JEL Classification: M13, L25, O33

Suggested Citation

Czarnitzki, Dirk and Delanote, Julie, Young Innovative Companies: The New High-Growth Firms? (April 1, 2012). KU Leuven - Department of Managerial Economics, Strategy and Innovation, OR 1208, Available at SSRN: https://ssrn.com/abstract=2198831 or http://dx.doi.org/10.2139/ssrn.2198831

Dirk Czarnitzki

KU Leuven - Department of Managerial Economics, Strategy, and Innovation ( email )

Naamsestraat 69 bus 3500
Leuven, 3000
Belgium

Centre for European Economic Research (ZEW) ( email )

P.O. Box 10 34 43
Mannheim, 68034
Germany

Julie Delanote (Contact Author)

KU Leuven - Department of Economics ( email )

Leuven, B-3000
Belgium

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