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Exploration of Wisdom Ages: Firm survival

  • 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))

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.

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Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 339.

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Length: 25 pages
Date of creation: 18 Dec 2013
Date of revision:
Handle: RePEc:hhs:cesisp:0339
Contact details of provider: Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/

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