R&D activities for becoming a high-growth firm through large jumps: evidence from Korean manufacturing

ABSTRACTAlthough firms are typically considered to grow continuously, discontinuous growth paths of low-growth firms, the so-called large jumps, are also frequently observed. However, while researchers have discussed large jumps theoretically, empirical evidence is lacking. Based on the gaps in the literature, this study examines how low-growth firms achieve large jumps and how such firms become high-growth firms by sustaining their growth momentum thereafter. By constructing a unique merged dataset of Korean manufacturing firms, we find that 24% of low-growth firms achieved large jumps and 27.4% of these maintained their growth momentum, becoming high-growth firms. The results show that R&D investment and R&D collaboration increase the probability of achieving large jumps. However, becoming a high-growth firm by sustaining the growth momentum after large jumps requires persistency of R&D investment and internal capabilities instead of collaboration. Our findings suggest management and policy implications...