The elusive quest for high-growth firms in Africa: when other metrics of performance say nothing

The purpose of this paper is to study the persistence of firm growth in Africa, dedicating special attention to high-growth firms. The worldwide interest in identifying high-growth firms comes from the idea that these firms will continue to outperform in the future and to create jobs. We exploit a rich dataset covering all formal firms operating in Senegal from 2006 to 2015 to scrutinize growth persistence. We document that growth rates are negatively correlated across time, especially for high-growth firms, in line with evidence from industrialized countries. A top performer is more likely to become a bad performer in the next period than to sustain its previous performance. We show that other indicators of performance (such as profitability and productivity in the first period) are unrelated to the persistence of growth. This finding challenges the possibility of policymakers and investors selecting persistent high-growth firms by scrutinizing their previous performances.