The World Bank’s new book that focuses on high growth firms (HGFs) through the analyzis of firm growth in 11 different countries, was just published. One of the countries under analysis is Hungary, and for this, the institute based their findings on Balázs Muraközy’s publication, titled “High-Growth Firms in Hungary ” (cowritten with Francesca de Nicolaval and Shawn W. Tan).
One of the book’s main findings is that HGFs not only increase job opportunities and productivity, but they also create spillover effects for other companies, through their innovation and global relations. Further, the book also details that these HGFs often struggle to keep the high growth for long periods. The book’s conclusion is that policy should focus on supporting HGFs in maintaining their growth rate rather than searching for and supporting potential HGFs.
Balázs and his cowriter’s publication seconds these aforementioned findings. In their article, they analyzed Hungarian microdata and found that spillover effects of HGFs are indeed present. They show that in sectors where HGFs are plenty, medium-growth firms tend to produce higher growth rates than similar companies do in sectors where HGFs are less preponderant.