Sven-Olov Daunfeldt

High-growth firms and family ownership

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 family ownership matters for being an HGF, using data on all private firms in Sweden during 1993–2006. Our study is possible due to a tax reform that required tax authorities to identify family relations among ultimate owners of every Swedish firm. We find that family ownership at first sight decreases the probability of exhibiting high growth, but further analysis indicates a more complex relationship. The negative effect of family ownership seems to be driven primarily by small firms, and sometimes even becomes positive when firm growth is analyzed over longer time periods. In addition, the negative effect of family ownership is no longer present when we analyze firms that transferred ownership and control for unobserved time-invariant firm-specific heterogeneity.

Using the eurostat-OECD definition of high-growth firms: a cautionary note

Purpose - – High-growth firms (HGFs) have attracted an increasing amount of attention from researchers and policymakers, and the Eurostat-Organisation for Economic Co-operation and Development (OECD) definition of HGFs has become increasingly popular. The paper aims to discuss this issue. Design/methodology/approach - – The authors use a longitudinal firm-level data set to analyze the implications of using the Eurostat-OECD definition. Findings - – The results indicate that this definition excluded almost 95 percent of surviving firms in Sweden, and about 40 percent of new private jobs during 2005-2008. Research limitations/implications - – The proportion of small firms and their growth patterns differ across countries, and the authors therefore advise caution in using this definition in future studies. Practical implications - – Policy based on the Eurostat-OECD definition of HGFs might be misleading or even counterproductive. Originality/value - – No previous studies have analyzed the implications of using the Eurostat-OECD definition of HGFs.

Congestion charges in Stockholm: how have they affected retail revenues?

Did the introduction of congestion charges in Stockholm city reduce retail revenues? Data from 20 shopping malls – 8 within the toll area, and 12 outside the toll area – and from a sample of retail stores located along the main shopping streets was analysed using an intervention-control approach. Favourable outcomes, such as reduced traffic, less emissions of carbon-dioxide and perceived improvements in air quality and accessibility, do not seem to have been offset by reduced revenues for retailers located within the toll area.

Does social trust speed up reforms? The case of central-bank independence

Many countries have undertaken central-bank independence reforms, but the years of implementation differ. What explains such differences in timing? This is of interest more broadly, as it sheds light on factors that matter for the speed at which economic reforms come about. We study a rich set of potential determinants, both economic and political, but put special focus on a cultural factor, social trust. We find empirical support for an inverse u-shape: Countries with low and high social trust implemented their reforms earlier than countries with intermediate levels. We make use of two factors to explain this pattern: the need to undertake reform (which is more urgent in countries with low social trust) and the ability to undertake reform (which is greater in countries with high social trust).

Firm growth in the Swedish retail and wholesale industries

To identify the determinants of firm growth in the Swedish retail and wholesale industries during 2000–2004, we analyse a sample of 400 limited liability companies using quantile regression techniques. Firm growth was mainly found to depend upon time-invariant firm-specific effects, supporting Penroses [1959. The theory of the growth of the firm (4th ed.). New York: Oxford University Press] suggestion that internal resources such as firm culture, brand loyalty, entrepreneurial skills, and so on are important determinants of firm growth.

Revenues as a proxy for profits: a cautionary note

In the entry literature, researchers sometimes use revenues as a proxy for profits because this is the only data available. Doing so could seriously bias the results.

What happens when IKEA comes to town

ABSTRACT What happens when IKEA comes to town? Regional Studies. The effects of a new IKEA store on retail revenues, employment and inflow of purchasing power in the entry municipalities as well as in neighbouring municipalities were investigated using data from 2000–11. A propensity score-matching method was used to find non-IKEA entry municipalities that were as similar as possible to the entry municipalities based on the situation before entry. The results indicate that IKEA entry increased entry municipality durable goods revenues by about 20% and employment by about 17%. Only small and, in most cases, statistically insignificant effects were found in neighbouring municipalities.

Bursting into life: Firm growth and growth persistence by age

Is firm growth more persistent for young or old firms? Theory gives us no clear answer, and previous empirical investigations have been hampered by a lack of detailed data on firm age, as well as a non-representative coverage of young firms. We overcome these shortcomings using a rich dataset on all limited liability firms in Sweden during 1997-2010, covering firms of all ages and information on registered start year. We find that sales growth for new ventures is characterized by positive persistence, whereas it quickly turns negative and remains negative as firms get older. It thus seems that the growth paths of older firms are buffeted around by environmental turbulence, and that older firms may have challenges in adapting their strategies to changing market conditions, whereas new firms experience an early burst of sustained growth.

Sleeping Gazelles: The Unseen Job Creators?

High-growth firms have recently received considerable attention in the firm growth literature. These firms might have grown despite the existence of growth barriers, and evidence also suggests that ...

Market reform and food prices: did the 1912 Slaughterhouse Reform affect meat prices in Stockholm?

In February 1912, the Slaughterhouse Reform was introduced by the city of Stockholm to address the unsanitary conditions prevalent in the production and sale of meat, and thereby improve food safety. However, opponents argued that the reform would lead to price increases, and that poorer households would therefore replace meat with cheaper products. We find that meat prices increased by 21% due to the introduction of the reform, which meant that consumers had to pay a substantial cost for improved food safety within the boundaries of Stockholm.