Contrary to the findings in Grover, Medvedev and Olafsen (2019), most HGFs in Ethiopia are drawn from the size category with 10-49 employees, however, a very small share of HGFs are young. This finding is consistent with prior studies on Ethiopia and similar countries in Africa. In terms of the sectors of origin, it is not necessarily a high-tech sector that generates a disproportionate share of HGFs, as exemplified in Ethiopia. A relatively large share of HGFs in Ethiopia are drawn from the food and beverages industry, a traditionally low-tech sector. Finally, when it comes to HGFs, geography plays a critical role, with Addis Ababa, the capital city accounting for nearly 60 percent of all HGFs during the period of study.

Empirical analysis on the correlates of HGFs suggests that, _first,_ initial period plant productivity level has a strong, positive and significant association with the probability of attaining high-growth. This relationship is heightened after the industrial policy reforms. _Second,_ plants located in top cities and agglomeration centers and those within 0-50-kilometer bands have a greater probability of achieving high-growth vis-àvis plants that are located father away. _Third_ , industry concentration is negatively associated with high growth. Plants operating in concentrated industries are at a relative disadvantage when locating in agglomeration centers as they compete for the scare resources. These results are robust to several specification tests and also after controlling for unobserved plant heterogeneity. _Fourth_ , the industrial policy reforms in 2004 appear to have accentuated the locational fundamentals critical for high growth in the sense that locating in Addis Ababa heightened the probability of attaining high-growth after the reforms. _Finally,_ high-growth is a positive and self-reinforcing experience in Ethiopia that helps plants enhance their subsequent productivity growth.

The results of this paper point to one area as a clear avenue for future research: The paper establishes a positive link between initial plant productivity and the probability of high-growth, and also that experiencing a high-growth episode is associated with accelerated productivity growth. Given that high firm growth is difficult to sustain and that it does not lend much assurance of survival, there is much fragility in high growth and the link between high-growth and survival is weak for Ethiopia. Taken together, what does this result imply for the relationship between productivity and firm survival? At what stage of a firm’s life-cycle does productivity matter for survival and if this threshold is not met, does the firm exit the market? Based on the findings of this paper, future research in this field could explore the link between productivity and firm survival.

# **References**

- Abebe, G., M. McMillan and M. Serafinelli. (2018). “ _Foreign Direct Investment and Knowledge Diffusion in Poor Locations: Evidence from Ethiopia_ ,” NBER Working Papers 24461, National Bureau of Economic Research, Inc.

- Acs, Zoltan J., William Parsons and Spencer Tracy, (2008). “ _High-impact firms: gazelles revisited_ .” Washington, DC: U.S. Small Business Administration

- Anyadike-Danes, M., Bonner, K., Hart, M., and Mason, C. (2009). _“Measuring Business Growth–Highgrowth firms and their contribution to employment in the UK.”_ ERINI. Economic Research Institute of Northern Ireland, Monograph, (44).

- Anyadike-Danes, M., K. Bonner, and M. Hart. (2013). “ _Exploring the Incidence and Spatial Distribution of High Growth Firms in the UK and Their Contribution to Job Creation.”_ Working Paper 13/05, National Endowment for Science, Technology and the Arts, London

- Audretsch, D. B., and M. P. Feldman. (1996). “ _Innovative Clusters and the Industry Life Cycle_ .” Review of Industrial Organization 11 (2), 253–73.

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