Demography of the Firm: A Useful Metaphor?

Demography of the firm is an interdisciplinaryresearch field of economics, sociology andeconomic geography. Although the name suggestsotherwise, demographic input has been limiteduntil recently. This article argues that thedemographic viewpoint may lead to added value.The metaphor is relevant, not because firms aresimilar to biological creatures (they are not),but because there are significant parallels inthe mechanisms of population change, as aresult of selective processes of birth anddeath, as well as aging and internal change ofincumbent firms. The nature of these changeprocesses at the micro level has to be studiedusing theories from other disciplines, such aseconomics, sociology and geography; a situationquite similar to that of human demography. Thearticle compares similarities and discrepanciesbetween the processes of birth and death infirm and human populations, as well as the mostimportant dimensions of population structureand change, e.g. age, period, and cohort. Amain difference is that in addition to thesefamiliar variables in human demography, firmsize and growth, and economic activity are alsomajor dimensions of the structure of firmpopulations. Because there are stronginteractions between these variables, anydemographic analysis, for instance to determinethe age curve of mortality, should also takeinto account these variables.