Gazelle Companies: A Study on whether Invested Gazelle Companies Outperform Gazelle Companies without Investment

Abstract

The term “gazelle companies” has been studied for over 30 years, since David Birch coined the term in 1987. In Denmark, Gazelle companies have been identified on a yearly basis by the newspaper company Børsen since 1995. Furthermore, investors are looking towards these gazelles as potential investments. This research paper analyzes whether gazelle companies with investments outperform the gazelle companies without investments. Our research is conducted on a panel dataset, which includes Danish limited liability companies called ApS and A/S, with annual reports from 1998-2020. The dataset includes banktrupty data from 1998-2015. The analysis uses linear regression models, Shumway Hazard Model and logit models in Stata. Our results show that invested gazelle companies do grow more when looking at numbers from the income statement and employee numbers. The invested gazelle companies are however on average less profitable and have a higher risk of going bankrupt. Our analysis also shows that there are no industries with a significantly higher share of gazelle companies.