IDEAS home Printed from https://ideas.repec.org/p/hhs/cesisp/0339.html
   My bibliography  Save this paper

Exploration of Wisdom Ages: Firm survival

Author

Listed:
  • Backman, Mikaela

    () (Centre of Excellence for Science and Innovation Studies (CESIS), Jönköping International Business School, & Centre for Entrepreneurship and Spatial Economics (CEnSE))

  • Karlsson, Charlie

    () (Centre of Excellence for Science and Innovation Studies (CESIS), Jönköping International Business School, & Centre for Entrepreneurship and Spatial Economics (CEnSE))

Abstract

Studies confirm a tendency where elder individuals are more prone to become entre¬preneurs. Their motives are numerous ranging from feeling social included to maintain the same income level. Interesting as such, this paper contributes to the existing literature by taking this one step further and examine the surviving of new and existing firms that are run by elder individuals (one-em¬ployee firms) or have a high share of elderly individuals. Elderly individuals are defined as those above the age of 55 or 64. The results show that the average marginal effect on the prob-ability of survival from individuals above 55 and 64 differs across firm size. Elderly individuals negatively influence the survival of smaller firms (below ten employees). For larger firms the negative effect from elderly individuals is smaller, zero or even positive. Exploring the data, we find that “elderly firms”, defined as firms that have a majority of employees above the age of 55 or above the age of 64, have a lower survival rate and lower average number of employees but a higher value added per employee.

Suggested Citation

  • Backman, Mikaela & Karlsson, Charlie, 2013. "Exploration of Wisdom Ages: Firm survival," Working Paper Series in Economics and Institutions of Innovation 339, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
  • Handle: RePEc:hhs:cesisp:0339
    as

    Download full text from publisher

    File URL: https://static.sys.kth.se/itm/wp/cesis/cesiswp339.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Giacomin, Olivier & Janssen, Frank & Guyot, Jean-luc & Lohest, Olivier, 2011. "Opportunity and/or necessity entrepreneurship? The impact of the socio-economic characteristics of entrepreneurs," MPRA Paper 29506, University Library of Munich, Germany.
    2. Mata, Jose & Portugal, Pedro, 1994. "Life Duration of New Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 42(3), pages 227-245, September.
    3. Sjoerd Beugelsdijk & Niels Noorderhaven, 2005. "Personality Characteristics of Self-Employed; An Empirical Study," Small Business Economics, Springer, vol. 24(2), pages 159-167, March.
    4. Aldrich, Howard E. & Cliff, Jennifer E., 2003. "The pervasive effects of family on entrepreneurship: toward a family embeddedness perspective," Journal of Business Venturing, Elsevier, vol. 18(5), pages 573-596, September.
    5. Beate Rotefoss & Lars Kolvereid, 2005. "Aspiring, nascent and fledgling entrepreneurs: an investigation of the business start-up process," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 17(2), pages 109-127, March.
    6. Niels Bosma & Mirjam van Praag & Roy Thurik & Gerrit de Wit, 2004. "The Value of Human and Social Capital Investments for the Business Performance of Startups," Small Business Economics, Springer, vol. 23(3), pages 227-236, October.
    7. Richard Desjardins & Arne Jonas Warnke, 2012. "Ageing and Skills: A Review and Analysis of Skill Gain and Skill Loss Over the Lifespan and Over Time," OECD Education Working Papers 72, OECD Publishing.
    8. Werner Bönte & Oliver Falck & Stephan Heblich, 2009. "The Impact of Regional Age Structure on Entrepreneurship," Economic Geography, Clark University, vol. 85(3), pages 269-287, July.
    9. Michael Hout & Harvey Rosen, 2000. "Self-Employment, Family Background, and Race," Journal of Human Resources, University of Wisconsin Press, vol. 35(4), pages 670-692.
    10. Martin Andersson & Steven Klepper, 2013. "Characteristics and performance of new firms and spinoffs in Sweden," Industrial and Corporate Change, Oxford University Press, vol. 22(1), pages 245-280, February.
    11. Forbes, Daniel P., 2005. "Are some entrepreneurs more overconfident than others?," Journal of Business Venturing, Elsevier, vol. 20(5), pages 623-640, September.
    12. Douglas Holtz-Eakin & David Joulfaian & Harvey S. Rosen, 1994. "Entrepreneurial Decisions and Liquidity Constraints," RAND Journal of Economics, The RAND Corporation, vol. 25(2), pages 334-347, Summer.
    13. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    14. Alberto Arias & Inaki Pena, 2010. "The effect of entrepreneurs' motivation and the local economic environment on young venture performance," International Journal of Business Environment, Inderscience Enterprises Ltd, vol. 3(1), pages 38-56.
    15. Thurik, A. Roy & Carree, Martin A. & van Stel, André & Audretsch, David B., 2008. "Does self-employment reduce unemployment?," Journal of Business Venturing, Elsevier, vol. 23(6), pages 673-686, November.
    16. Lorraine Uhlaner & Roy Thurik, 2007. "Postmaterialism influencing total entrepreneurial activity across nations," Journal of Evolutionary Economics, Springer, vol. 17(2), pages 161-185, April.
    17. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
    18. Bates, Timothy, 1995. "Self-employment entry across industry groups," Journal of Business Venturing, Elsevier, vol. 10(2), pages 143-156, March.
    19. Robert Carroll & Douglas Holtz-Eakin & Mark Rider & Harvey S. Rosen, 1996. "Income Taxes and Entrepreneur' Use of Labor," Working Papers 752, Princeton University, Department of Economics, Industrial Relations Section..
    20. Jenny Meyer, 2011. "Workforce age and technology adoption in small and medium-sized service firms," Small Business Economics, Springer, vol. 37(3), pages 305-324, October.
    21. Borghans,Lex & Weel,Bas,ter, 2002. "Do Older Workers Have More Trouble Using a Computer Than Younger Workers?," ROA Research Memorandum 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    22. Joachim Wagner & Rolf Sternberg, 2004. "Start-up activities, individual characteristics, and the regional milieu: Lessons for entrepreneurship support policies from German micro data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(2), pages 219-240, June.
    23. Kihlstrom, Richard E & Laffont, Jean-Jacques, 1979. "A General Equilibrium Entrepreneurial Theory of Firm Formation Based on Risk Aversion," Journal of Political Economy, University of Chicago Press, vol. 87(4), pages 719-748, August.
    24. Phillip Kim & Howard Aldrich & Lisa Keister, 2006. "Access (Not) Denied: The Impact of Financial, Human, and Cultural Capital on Entrepreneurial Entryin the United States," Small Business Economics, Springer, vol. 27(1), pages 5-22, August.
    25. Andrew Henley, 2005. "Job Creation by the Self-employed: The Roles of Entrepreneurial and Financial Capital," Small Business Economics, Springer, vol. 25(2), pages 175-196, September.
    26. Gilly, Mary C & Zeithaml, Valarie A, 1985. " The Elderly Consumer and Adoption of Technologies," Journal of Consumer Research, Oxford University Press, vol. 12(3), pages 353-347, December.
    27. Ingrid Verheul & Linda van Mil, 2008. "What Determines the Growth Ambition of Dutch Early-Stage Entrepreneurs?," Scales Research Reports H200811, EIM Business and Policy Research.
    28. Robinson, Peter B. & Sexton, Edwin A., 1994. "The effect of education and experience on self-employment success," Journal of Business Venturing, Elsevier, vol. 9(2), pages 141-156, March.
    29. Veronique A.J.M. Schutjens & Egbert Wever, 2000. "Determinants of new firm success," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(2), pages 135-153.
    30. Larson, Andrea, 1991. "Partner networks: Leveraging external ties to improve entrepreneurial performance," Journal of Business Venturing, Elsevier, vol. 6(3), pages 173-188, May.
    31. Heiko Bergmann & Rolf Sternberg, 2007. "The Changing Face of Entrepreneurship in Germany," Small Business Economics, Springer, vol. 28(2), pages 205-221, March.
    32. Parker,Simon C., 2006. "The Economics of Self-Employment and Entrepreneurship," Cambridge Books, Cambridge University Press, number 9780521030632, January.
    33. Peter Zwan & Roy Thurik & Ingrid Verheul & Jolanda Hessels, 2016. "Factors influencing the entrepreneurial engagement of opportunity and necessity entrepreneurs," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 6(3), pages 273-295, December.
    34. P. Mueller, 2006. "Entrepreneurship in the Region: Breeding Ground for Nascent Entrepreneurs?," Small Business Economics, Springer, vol. 27(1), pages 41-58, August.
    35. Dunn, Thomas & Holtz-Eakin, Douglas, 2000. "Financial Capital, Human Capital, and the Transition to Self-Employment: Evidence from Intergenerational Links," Journal of Labor Economics, University of Chicago Press, vol. 18(2), pages 282-305, April.
    36. BodenJR., Richard J. & Nucci, Alfred R., 2000. "On the survival prospects of men's and women's new business ventures," Journal of Business Venturing, Elsevier, vol. 15(4), pages 347-362, July.
    37. Birley, Sue, 1985. "The role of networks in the entrepreneurial process," Journal of Business Venturing, Elsevier, vol. 1(1), pages 107-117.
    38. Börje Johansson & Johan Klaesson & Michael Olsson, 2003. "Commuters’ non-linear response to time distances," Journal of Geographical Systems, Springer, vol. 5(3), pages 315-329, November.
    39. Audretsch, David B, 1991. "New-Firm Survival and the Technological Regime," The Review of Economics and Statistics, MIT Press, vol. 73(3), pages 441-450, August.
    40. Börje Johansson & Johan Klaesson & Michael Olsson, 2002. "Time distances and labor market integration," Papers in Regional Science, Springer;Regional Science Association International, vol. 81(3), pages 305-327.
    41. Thomas Dunn & Douglas Holtz-Eakin, 1996. "Financial Capital, Human Capital, and the Transition to Self-Employment:Evidence from Intergenerational Links," NBER Working Papers 5622, National Bureau of Economic Research, Inc.
    42. Teemu Kautonen & Erno Tornikoski & Ewald Kibler, 2011. "Entrepreneurial intentions in the third age: the impact of perceived age norms," Small Business Economics, Springer, vol. 37(2), pages 219-234, September.
    43. van Praag, C M & Cramer, J S, 2001. "The Roots of Entrepreneurship and Labour Demand: Individual Ability and Low Risk Aversion," Economica, London School of Economics and Political Science, vol. 68(269), pages 45-62, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    ageing; firm survival; employer-employee matched data;

    JEL classification:

    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:cesisp:0339. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vardan Hovsepyan). General contact details of provider: http://edirc.repec.org/data/cekthse.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.