Bursting into life: Firm growth and growth persistence by age

Alex Coad (), Sven-Olov Daunfeldt and Daniel Halvarsson ()
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Daniel Halvarsson: The Ratio institute, Postal: The Ratio Institute, P.O. Box 5095, SE-102 42 Stockholm, Sweden, http://ratio.se/medarbetare/daniel-halvarsson/

No 264, Ratio Working Papers from The Ratio Institute

Abstract: Is firm growth more persistent for young or old firms? Theory gives us no clear answer, and previous empirical investigations have been hampered by a lack of detailed data on firm age, as well as a non-representative coverage of young firms. We overcome these shortcomings using a rich dataset on all limited liability firms in Sweden during 1997-2010, covering firms of all ages and information on registered start year. We find that sales growth for new ventures is characterized by positive persistence, whereas it quickly turns negative and remains negative as firms get older. It thus seems that the growth paths of older firms are buffeted around by environmental turbulence, and that older firms may have challenges in adapting their strategies to changing market conditions, whereas new firms experience an early burst of sustained growth.

Keywords: Firm age; growth rate autocorrelation; sales growth; learning-bydoing; minimum efficient scale (search for similar items in EconPapers)
JEL-codes: D22 L25 L26 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-12-23
New Economics Papers: this item is included in nep-bec, nep-ent, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Bursting into life: firm growth and growth persistence by age (2018)
Working Paper: Bursting into life: Firm growth and growth persistence by age (2015)
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