Economics, Econometrics and Finance
4 years ago

Age like fine wine: Older firms show improved performance over time

Structural Change and Economic Dynamics
Like milk or wine: Does firm performance improve with age?
Alex Coad, Agustí Segarra‐Blasco, Mercedes Teruel

Paper Summary

Firm performance changes with age. Older firms tend to have higher productivity, profits, and size, as well as lower debt ratios. They are better at turning sales growth into profit and productivity growth. However, older firms also have lower expected growth rates and profitability levels, and struggle to convert employment growth into sales, profit, and productivity growth.

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