Asian Journal of Innovation and Policy

Asian Society for Innovation and Policy (아시아기술혁신학회)
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Long-term Growth Patterns and Determinants of High-growth Startups - Focusing on Korean Gazelle Companies during 2006-2020

  • Ko, Chang-Ryong (Department of Economics, Hannam University) ;
  • Lee, Jong Yun (Department of Economics and Statistics, Korea University, Seol and Values) ;
  • Seol, Sung-Soo (Department of Economics, Hannam University)
  • Received : 2021.11.23
  • Accepted : 2021.12.27
  • Published : 2021.12.31
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Abstract

To know the long-term growth patterns and determinants of successful startups, 15-year (2006-2020) panel data of 252 companies that had a growth rate of over 20% every year in the last three years were used. In the first analysis, statistics on the period required to designate a gazelle company or listed on the stock market were examined. In addition, five long-term growth patterns were presented. In the panel analysis, the R&D intensity, operating profit ratio, size, and age of the company were pointed out as determinants of growth. The operating profit margin and R&D intensity have a positive effect on growth. Gibrat's law was not supported, but an inverted U-shape was observed. Jovanovic's law was confirmed. Although many studies tend not to point to profitability as a determinant of long-term growth, this is an important long-term growth factor of a company. The operating profit ratio was used in this study.

Keywords

Acknowledgement

An early version of this study was presented at the ASIP 2021 Jeju conference on October 7~10. We would like to thank Professor Takao Fujiwara of Toyohashi Institute of Technology in Japan, Professor M H Bala Subramanya of Indian Institute of Science in India, and Professor Angelina Yee of Asia Pacific University of Technology and Innovation in Malaysia for commenting. We also thank Professor Gap-Soo Kim of KAIST Graduate School of Technology Management for providing R&D data and commenting, Dr. Hyuk Lee of STEPI, and Professor Seon-Ho Lee of Hannam University for estimation. The shortcomings and errors are, of course, the responsibility of the authors.

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