TY - JOUR
T1 - Like milk or wine
T2 - Does firm performance improve with age?
AU - Coad, Alexander Jean-Luc
AU - Segarra, A.
AU - Teruel, M.
PY - 2013
Y1 - 2013
N2 - Little is known about how firm performance changes with age, presumably because of the paucity of data on firm age. We analyze the performance of a panel of Spanish manufacturing firms between 1998 and 2006, relating it to firm age. We find evidence that firms improve with age, because ageing firms are observed to have steadily increasing levels of productivity, higher profits, larger size, lower debt ratios, and higher equity ratios. Furthermore, older firms are better able to convert sales growth into subsequent growth of profits and productivity. On the other hand, we also found evidence that firm performance deteriorates with age. Older firms have lower expected growth rates of sales, profits and productivity, they have lower profitability levels (when other variables such as size are controlled for), and also that they appear to be less capable to convert employment growth into growth of sales, profits and productivity.
AB - Little is known about how firm performance changes with age, presumably because of the paucity of data on firm age. We analyze the performance of a panel of Spanish manufacturing firms between 1998 and 2006, relating it to firm age. We find evidence that firms improve with age, because ageing firms are observed to have steadily increasing levels of productivity, higher profits, larger size, lower debt ratios, and higher equity ratios. Furthermore, older firms are better able to convert sales growth into subsequent growth of profits and productivity. On the other hand, we also found evidence that firm performance deteriorates with age. Older firms have lower expected growth rates of sales, profits and productivity, they have lower profitability levels (when other variables such as size are controlled for), and also that they appear to be less capable to convert employment growth into growth of sales, profits and productivity.
UR - http://www.scopus.com/inward/record.url?scp=84864135166&partnerID=8YFLogxK
U2 - 10.1016/j.strueco.2012.07.002
DO - 10.1016/j.strueco.2012.07.002
M3 - Journal article
AN - SCOPUS:84873252237
SN - 0954-349X
VL - 24
SP - 173
EP - 189
JO - Structural Change and Economic Dynamics
JF - Structural Change and Economic Dynamics
IS - 1
ER -