1. High growth firms in a regional perspective: Evidence for Austria
Workshop
High-Growth Firms: Local Policies and Local Determinants
Copenhagen, 28 March 2012
Werner Hölzl & Klaus Friesenbichler

2. High growth firms (HGFs) in Austria
Growth rate distribution in Austria has the same shape as the growth rate distribution for other countries:
Most firms have marginal growth rates and a few firm display very high rates of growth (decline)
However, the same evidence shows that Austria has a comparatively low number of high growth and high decline firms and a quite large share of stable firms

3. The Research
Surprisingly little is known about HGF from an regional or local perspective.
In the proposed research we study the share of high growth firms for Austrian NUTS-3 regions.
Do we observe significant differences in the share of HGF across Austrian Nuts3 regions?
What explains those differences?
What about manufacturing and KIBS?

4. The Research
The available literature (e.g. Henrekson and Johansson 2010) suggests that we should not observe systematic differences as:
The likelihood of observing HGFs should be independent of patterns of industrial specialization.
The likelihood of observing HGFs should be correlated with growth rates at the industry level.
We observe some minor divergence of growth rates between Nuts3 regions but not in an order of magnitude as to expect very divergent patterns of HGF shares.
Cross-country comparisons (e.g. Bravo-Biosca 2010) show considerable differences in HGF shares and growth rate distributions across countries.
Institutional differences are minor, even if Austria is a federal country.

5. Data HGF data are derived from the Austrian Social Security files
annual employment stocks a for all private sector firms with at least one employee
Time 1994 to 2009: five 3-year periods: 1995/1997, 1998/2000, 2001/2003, 2003/2006, 2007/2009
35 NUTS3 districts
Additional Data: Statistics Austria & Eurostat, OECD

6. High growth firms We use the Eurostat/OECD definition:
More than 20% p.a. relative growth in three years
Larger than 10 employees at the beginning
Other definitions are used in our research to check robustness
high impact firms (top 5% of ‘Birch index’ distribution, i.e. absolute * relative growth index)

7. Growth rate distribution at the firm level across Nuts3 regions and time

8. Average growth rates of HGF, LGF and stationary firms

9. HGF shares at the Nuts3 level
Linz
Salzburg
Vienna
Innsbruck
Graz

10. HGF shares at the Nuts3 level
Linz
Salzburg
Vienna
Innsbruck
Graz

11. HGF shares at the Nuts3 level
Linz
Salzburg
Vienna
Innsbruck
Graz

12. HGF shares at the Nuts3 level
Linz
Salzburg
Vienna
Innsbruck
Graz

13. HGF shares at the Nuts3 level
Linz
Salzburg
Vienna
Innsbruck
Graz

14. Some impressions Regional differences seem to be systematic
Higher share of HGF in urban areas
Some degree of persistence over time
Why?

15. Regional indicators Urban (Eurostat):
5: urban to 1: rural, remote
Specialization (Marshallian externalities)
Variety (Jacobs externalities)
Related variety (within 2 digit – related activities)
Unrelated variety (across 2 digit industries – unrelated activities)

16. Preliminary results

17. preliminary results Share of high decline firms Seems not to matter
much
Dynamics matter
but not in form of
Firm entry and exit
Labour market
dynamics
Employment growth
Is associated with
HGF share

18. preliminary results Share of high Impact firms Variety
is more important
than specializaiton
RV and UV are quite
correlated

19. Results in words Growth matters Dynamics matter Variety matters
More HGFs in regions with higher growth rates
Dynamics matter
More HGFs in regions with higher excess labour turnover. Firm turnover (entry/exit) seems not to be as relevant for HGFs.
Variety matters
More HGFs in regions with higher (unrelated) variety; Jacobs spillover are more important than specialization.

20. Further research
Look at different industries (manufacturing, services)
KIBS: many regions do not have enough firms with more than 10 employees to calculate HGF share
What is behind the importance of unrelated variety
May yield deeper policy insights
Robustness checks
HGF share and regional growth
Other definitions of HGFs (HIF)

21. Thank you