Sleeping Gazelles: The Unseen Job Creators?

Abstract

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, having already grown exponentially, they may not be in the best position to grow further. Policies targeting high-growth firms may therefore be misdirected. We argue that entrepreneurship researchers should concentrate more on firms that are not hiring, despite having high profits. We call these firms “sleeping gazelles,” and demonstrate that they represented almost 10% of all limited liability firms in Sweden from 1997 to 2010. Nearly half of these firms continued to earn high or moderate profits in subsequent three-year periods, while still displaying no growth. Regression analyses indicate that these firms were significantly smaller, older, more likely to be active in industries with high profit uncertainty, and more likely to be located in less densely populated municipalities than were corresponding growing firms.

Citation

Bornhäll, A., Daunfeldt, S.-O. and Rudholm, N. (2015), "Sleeping Gazelles: The Unseen Job Creators?", Entrepreneurial Growth: Individual, Firm, and Region (Advances in Entrepreneurship, Firm Emergence and Growth, Vol. 17), Emerald Group Publishing Limited, Leeds, pp. 161-185. https://doi.org/10.1108/S1074-754020150000017013