Gazelles and industry growth: a study of young high-growth firms in The Netherlands

This article examines to what extent and how the presence of gazelles, young high-impact firms, is related to the growth of industries over time. For this purpose, we analyze gazelles in The Netherlands over a 12-year period, annually from 1997 until 2008, and relate them to the dynamics of industry employment. We use a panel vector autoregressive model to explore the relationship between the prevalence of gazelles in an industry and industry employment growth, in an economy-wide dataset including 43 two-digit industries. An increase in the prevalence of gazelles in an industry appears to have a positive effect on subsequent industry growth. We do not find evidence of an inverse causal relationship: there are no long-run positive effects of increases in industry growth on the prevalence of gazelles. There is also no relationship between overrepresentation of gazelles and subsequent industry growth.