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The age distribution of business firms

Author

Listed:
  • Flavio Calvino

    (OECD Directorate for Science, Technology and Innovation)

  • Daniele Giachini

    (Sant’Anna School of Advanced Studies
    “Scuola Superiore Sant’Anna”)

  • Mattia Guerini

    (Sant’Anna School of Advanced Studies
    University of Brescia
    Université Côte d’Azur)

Abstract

We investigate upon the shape and the determinants of the age distribution of business firms. By employing a novel dataset covering the population of French businesses, we highlight that a geometric law provides a reasonable approximation for the age distribution. However, relevant systematic deviations and sectoral heterogeneity appear. We develop a stochastic model of firm dynamics to explain the mechanisms behind this evidence and relate them to business dynamism. Results reveal a long-term decline in entry rates and lower survival probabilities of young firms. Our findings bear important implications for aggregate outcomes, notably employment growth.

Suggested Citation

  • Flavio Calvino & Daniele Giachini & Mattia Guerini, 2022. "The age distribution of business firms," Journal of Evolutionary Economics, Springer, vol. 32(1), pages 205-245, January.
    • Handle: RePEc:spr:joevec:v:32:y:2022:i:1:d:10.1007_s00191-021-00747-2
    DOI: 10.1007/s00191-021-00747-2
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    2. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2022. "Technological paradigms, labour creation and destruction in a multi-sector agent-based model," Research Policy, Elsevier, vol. 51(10).

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    More about this item

    Keywords

    Firm demographics; Age distribution; Business dynamism;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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