Sources of Firm Life-Cycle Dynamics: Size vs. Age Effects

Lorenz Kueng, Mu-Jeung Yang and Bryan Hong
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Mu-Jeung Yang: University of Washington - Department of Economics
Bryan Hong: New York University (NYU) - Leonard N. Stern School of Business

No 20-34, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: What determines the life-cycle of businesses? Exploiting unique firm-level panel data on internal organization and innovation we establish three key sets of stylized facts to inform recent theories of firm life-cycles. First, life-cycle effects are driven by startups, not by new establishments of existing firms. Second, organizational restructuring and innovation are both strongly correlated with firm growth but not with firm age, in contrast to passive learning theories of firm dynamics. Third, there are important sectoral differences in innovation activities which are monotonically increasing in firm size for manufacturing firms but hump-shaped for firms in service industries.

Keywords: firm life-cycle; organizational capital; innovation (search for similar items in EconPapers)
Pages: 37 pages
Date: 2020-04
New Economics Papers: this item is included in nep-bec, nep-gen, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:chf:rpseri:rp2034

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