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The Age Distribution of Business Firms

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

No 2020-36, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

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)
Pages: 37 pages
Date: 2020-08
New Economics Papers: this item is included in nep-bec, nep-eff, nep-ent, nep-ind, nep-ore and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:gre:wpaper:2020-36

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