2020/20 | LEM Working Paper Series | ||||||||||||||||
The age distribution of business firms |
|||||||||||||||||
Flavio Calvino, Daniele Giachini and Mattia Guerini |
|||||||||||||||||
Keywords | |||||||||||||||||
Firm demographics; age distribution; business dynamism.
|
|||||||||||||||||
JEL Classifications | |||||||||||||||||
L11, L22, M13, M21
|
|||||||||||||||||
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.
|
Downloads
|
|
| |
|
Back
|
|