High Growth Young Firms: Contribution to Job, Output and Productivity Growth

75 Pages Posted: 15 Nov 2016

See all articles by John Haltiwanger

John Haltiwanger

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER); Institute for the Study of Labor (IZA)

Ron S. Jarmin

U.S. Census Bureau

Robert B. Kulick

NERA Economic Consulting

Javier Miranda

U.S. Census Bureau - Center for Administrative Records Research and Applications

Date Written: November 1, 2016

Abstract

Recent research shows that the job creating prowess of small firms in the U.S. is better attributed to startups and young firms that are small. But most startups and young firms either fail or don’t create jobs. A small proportion of young firms grow rapidly and they account for the long lasting contribution of startups to job growth. High growth firms are not well understood in terms of either theory or evidence. Although the evidence of their role in job creation is mounting, little is known about their life cycle dynamics, or their contribution to other key outcomes such as real output growth and productivity. In this paper, we enhance the Longitudinal Business Database with gross output (real revenue) measures. We find that the patterns for high output growth firms largely mimic those for high employment growth firms. High growth output firms are disproportionately young and make disproportionate contributions to output and productivity growth. The share of activity accounted for by high growth output and employment firms varies substantially across industries – in the post 2000 period the share of activity accounted for by high growth firms is significantly higher in the High Tech and Energy related industries. A firm in a small business intensive industry is less likely to be a high output growth firm but small business intensive industries don’t have significantly smaller shares of either employment or output activity accounted for by high growth firms.

Suggested Citation

Haltiwanger, John C. and Jarmin, Ron S. and Kulick, Robert B. and Miranda, Javier, High Growth Young Firms: Contribution to Job, Output and Productivity Growth (November 1, 2016). US Census Bureau Center for Economic Studies Paper No. CES-WP-16-49. Available at SSRN: https://ssrn.com/abstract=2866566 or http://dx.doi.org/10.2139/ssrn.2866566

John C. Haltiwanger (Contact Author)

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
301-405-3504 (Phone)
301-405-3542 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Ron S. Jarmin

U.S. Census Bureau ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Robert B. Kulick

NERA Economic Consulting ( email )

1255 23rd Street NW
Suite 600
Washington, DC 20009
United States

Javier Miranda

U.S. Census Bureau - Center for Administrative Records Research and Applications ( email )

4700 Silver Hill Road
Washington, DC 20233
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
211
rank
141,802
Abstract Views
1,047
PlumX Metrics