High-growth firms in emerging economies account for more than 50% of all new jobs and sales despite making up less than 20% of all firms in manufacturing and services. These firms create a domino effect on others through increased demand and/or offering improved access to inputs.
A new World Bank Group report, “High-Growth Firms: Facts, Fiction, and Policy Options for Emerging Economies “acknowledges that the extraordinary capabilities of high-growth firms have attracted the interest of policy makers who are keen to figure out how to encourage the establishment of more of these high-performing firms to boost economic performance. The report is based on a detailed analysis of firm dynamics in Brazil, Côte d’Ivoire, Ethiopia, Hungary, India, Indonesia, Mexico, South Africa, Thailand, Tunisia, and Turkey. According to the report’s analysis, the link between productivity and high growth is often weak; as firms may grow for a variety of reasons beyond technical efficiency. (read more)