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The age distribution of business firms

Flavio Calvino, Daniele Giachini and Mattia Guerini
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Flavio Calvino: OECD Directorate for Science, Technology and Innovation
Daniele Giachini: Sant’Anna School of Advanced Studies

Journal of Evolutionary Economics, 2022, vol. 32, issue 1, No 8, 205-245

Abstract: 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.

Keywords: Firm demographics; Age distribution; Business dynamism (search for similar items in EconPapers)
JEL-codes: L11 L22 M13 M21 (search for similar items in EconPapers)
Date: 2022
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Working Paper: The Age Distribution of Business Firms (2020) Downloads
Working Paper: The age distribution of business firms (2020) Downloads
Working Paper: The age distribution of business firms (2020) Downloads
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DOI: 10.1007/s00191-021-00747-2

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