Age and firm growth: evidence from three European countries
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This article provides new insights into the dependence of firm growth on age along the entire distribution of growth rates, and conditional on survival. Using data from the European firms in a global economy survey, and adopting a quantile regression approach, we uncover evidence for a sample of French, Italian and Spanish manufacturing firms with more than ten employees in the period from 2001 to 2008. We find that: (1) young firms grow faster than old firms, especially in the highest growth quantiles; (2) young firms face the same probability of declining as their older counterparts; (3) results are robust to the inclusion of other firms’ characteristics such as labor productivity, capital intensity and the financial structure; (4) high growth is associated with younger chief executive officers and other attributes that capture the attitude of the firm toward growth and change. The effect of age on firm growth is rather similar across countries.
KeywordsFirm growth Age Quantile regression
JEL ClassificationsL21 L25 L26 L60
The authors wish to thank two anonymous referees for their useful remarks. Comments from Agustí Segarra, Mercedes Teruel and participants at seminars and conferences in Castellón (January 2012), Valencia (Dpto. de Economia Aplicada II, April 2012; IVIE, October 2012), A Coruña (XV Encuentros de Economía Aplicada, June 2012), Tarragona (Workshop on Firm Growth and Innovation, June 2012) and Palma de Mallorca (March 2013) are also greatly appreciated. The usual disclaimer applies. Fabio Pieri greatly acknowledges the financial support of the Spanish Ministry of Science and Innovation (project MINECO ECO2011-27619 co-financed with FEDER). This article was completed within the EFIGE project (contract no. 225551) funded by the European Commission under the Seventh Framework Programme.
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