Fast growing mid-sized firms in Europe: Presentations are now available

RISIS project has recently organised the first Policymakers’ Session, that took place on October 24th 2019 and was hosted by Clora (Club des Organismes de Recherche Associés), in Brussels. The meeting, titled “Fast growing mid-sized firms in Europe. Evidence from the RISIS-Cheetah database” has explored European mid-size firms from RISIS Cheetah data. Presentation material is now available on RISIS-Zenodo community space.


The introduction set the context of Cheetah dataset and Cheetah firms: fast-growing firms have recently received considerable attention by academic scholars and policymakers for their crucial role in creating new jobs and stimulating economic growth, but little is known concerning the institutional and systemic factors that can stimulate growth. This calls for cross-country/regional comparative analysis in order to understand the kind of policy support that is most appropriate. Medium-sized firms are a category of firms that received somewhat less attention in the academic debate on firm growth, despite SMEs have been relevant for numerous EU policies: it seems that SMEs are considered as a unified group rather than separate categories in EU policy initiatives.


The RISIS-Cheetah dataset is a first attempt to map fast-growing mid-sized firms (Cheetah firms) in Europe. It contains geographical, industry and accounting information of European mid-sized firms that experienced fast growth during the periods 2008-11, 2009-12, 2010-13. Actually, it contains more than 40k Cheetah firms, including different indicators of growth (turnover vs. employment), basic firm-level information (incorporation date, industry), key accounting information (balance sheet, income statement and cash-flow), ownership information to assess the level of independence and the exact geographical coordinates (latitude and longitude).


Then, main results of Cheetah dataset have been discussed. Cheetah firms present great variability in terms of geographical and sectoral coverage, they are quite widespread in Europe, though not evenly across countries. In particular, have been identified 3 groups of countries based on the number of Cheetah firms, both in absolute terms and in terms of incidence: the first group includes large countries for number of Cheetah firms but with low incidence (France, Germany, Italy, Netherlands, Spain); the second group comprises countries with relatively less Cheetah firms but with a higher incidence (Baltic countries, Eastern European countries, and Scandinavian countries); the last case includes the UK, which is the only country combining high number and high incidence of Cheetah firms

Moreover, Cheetah firms differ from other types of mid-sized firms in several dimensionsthey are younger; they tend to be located in certain countries (Eastern Europe and UK); they are more active in certain sectors (High-Tech and Medium-Tech manufacturing, and Knowledge Intensive services);

Cheetah firms are able to achieve fast growth, but persistence is more difficult: almost 70% of the firms do not sustain growth after the first period of fast growth. Cheetah firms from certain countries and operating in certain sectors are more persistent.


The second part of the workshop allowed for interaction and discussion around key topics related to economic, demographic, and knowledge-based regional factors to the emergence of clusters of fast growing mid-firms in Europe. In particular, the number of fast growing mid-sized firms is significantly higher in regions located in the Eastern countries (including the Baltic countries) and in the UK with respect to Western countries. Institutional factors at country level (e.g. related to taxation, access to credit, investment protection and international trade) explain differences in the number of fast growing mid-sized firms across countries, and the number of fast growing mid-sized firms is positively related to regional population density and GDP per capita. This evidence seems to suggest the presence of agglomeration effects that make highly populated and richer regions a better environment to stimulate growth.

On average, regional human capital does not play a significant role in the emergence of fast growing mid-sized firms in the different sectors. However, in high-tech manufacturing and services sectors we observe a positive and statistically significant relationship between the regional presence of skilled human capital and the emergence of these firms.


Finally, were analysed policy implication and areas of further research:

1)Fast growing mid-sized firms represent a policy relevant and a so far unexplored phenomenon in Europe. It would be interesting to investigate what factors may have contributed to the growth of these firms (e.g. innovation activities), and whether their growth was mainly due to organic factors or was the results of mergers, acquisitions or delocalization processes.

2)Fast growing mid-sized firms are unevenly distributed within Europe, with Baltic and Eastern European countries playing an important role. It would be interesting to estimate the role of these firms in creating employment opportunities in Baltic and Eastern European countries, as well as whether and how they facilitated the economic cohesion in Europe in the last decade.

3)Local and regional factors play a relevant role in the localization of fast growth mid-sized firms in Europe. It would be interesting to compare the sectoral specialization of Cheetah firms with the strengths and comparative assets of the region in which they are located as described by the EU Smart Specialization Platform.