Can firm age account for productivity differences?

The productivity of enterprises is an important indicator, for individual enterprises as well as for policy makers. For individual firms, their productivity is a main determinant of their performance, while the aggregate productivity is one of the main determinants of economic growth. In this study we examine the relationship between the age of firms and the level and growth rate of productivity, focusing on firms of at least 10 years of age. For these firms, we will examine the following two research questions: How does the distribution of firm productivity (as characterised by mean and standard deviation) change over age cohorts? To which extent are differences in productivity between individual firms related to firm age?

On the relationship between firm age and productivity growth

For young firms, a clear relationship exists between firm age and productivity. Various studies have shown that the productivity level of new firms is below the average level, while the productivity growth rate of (surviving) young firms is above average. During the first few years, the average level of productivity tends to increase while the average growth rate tends to decrease. For elder, established firms, the relationship between age and productivity becomes less clear. Established firms show on average a positive growth rate, but whether this growth rate is related to the specific age of these firms is not well established. In this study we examine the relationship between the age of firms and their productivity growth, for establishes firms, where establishes firms are defined as firms of at least 10 years of age. Our research question is: to which extent are differences in productivity growth rates between individual firms related to firm age?

Creative industries

Creative industries are nowadays central in many policies to stimulate the economic development of cities, regions and advanced capitalist economies in general. This paper contributes to the� creative industries literature in two respects. First, we empirically explore if high shares of creative industries in regions go together with one particular aspect of regional economic development, namely firm entry rates. Drawing on Dutch trade register data over a six-year period, it is concluded that at the level of municipalities there is indeed a connection between the share of creative industries and firm entry, even after controlling for the sizes of municipalities, and no matter if creative industries are defined broadly or narrowly. Second, the paper analyses if firms in creative industries are heterogeneous in terms of business processes and their contribution to regional firm entry. Drawing on previous work four creative domains are identified: arts, media and entertainment, creative business services and, at the periphery, knowledge intensive business services. After analysing survey data of 4,746 Dutch SMEs, we find that firms across these domains are distinct in their use of the surveyed business practices: innovation, strategy and marketing, and human resources practices. Especially knowledge intensive services firms are deviant. For the connection with firm entry rates, it appears that high shares of firms in the arts and knowledge intensive business services are significantly connected with regional firm entry rates, while media and entertainment and creative business services remain insignificant. Implications for practitioners and future research are discussed. �