IDEAS home Printed from https://ideas.repec.org/a/eee/joecag/v15y2020ics2212828x19301021.html
   My bibliography  Save this article

Age of managers and employees – Firm survival

Author

Listed:
  • Backman, Mikaela
  • Karlsson, Charlie

Abstract

Many developed countries will face a disproportionately large share of older individuals in the future. This change may lead to a labour force characterized by older employees and older operational managers. This paper contributes to the existing literature on the effect of aging on firm performance by performing an explorative analysis of how the age of the operational manager and the age composition of employees relate to the survival of Swedish firms during 2004–2013. We observe that the relationship between the age of the operational manager and firm exit changes functional shape when separated into different firm-size categories. Additionally, the age of the operational manager tends to be more important for new firms compared to incumbents. The share of older employees is positively associated with firm survival.

Suggested Citation

  • Backman, Mikaela & Karlsson, Charlie, 2020. "Age of managers and employees – Firm survival," The Journal of the Economics of Ageing, Elsevier, vol. 15(C).
    • Handle: RePEc:eee:joecag:v:15:y:2020:i:c:s2212828x19301021
    DOI: 10.1016/j.jeoa.2019.100215
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2212828X19301021
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jeoa.2019.100215?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bates, Timothy, 1998. "Survival patterns among newcomers to franchising," Journal of Business Venturing, Elsevier, vol. 13(2), pages 113-130, March.
    2. Richard Desjardins & Arne Jonas Warnke, 2012. "Ageing and Skills: A Review and Analysis of Skill Gain and Skill Loss Over the Lifespan and Over Time," OECD Education Working Papers 72, OECD Publishing.
    3. Watson, John, 2007. "Modeling the relationship between networking and firm performance," Journal of Business Venturing, Elsevier, vol. 22(6), pages 852-874, November.
    4. Robert Petrunia, 2008. "Does Gibrat’s Law Hold? Evidence from Canadian Retail and Manufacturing Firms," Small Business Economics, Springer, vol. 30(2), pages 201-214, February.
    5. Cressy, Robert, 1996. "Are Business Startups Debt-Rationed?," Economic Journal, Royal Economic Society, vol. 106(438), pages 1253-1270, September.
    6. Eric Bartelsman & Stefano Scarpetta & Fabiano Schivardi, 2005. "Comparative analysis of firm demographics and survival: evidence from micro-level sources in OECD countries," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 14(3), pages 365-391, June.
    7. Mercedes Teruel-Carrizosa, 2010. "Gibrat’s law and the learning process," Small Business Economics, Springer, vol. 34(4), pages 355-373, May.
    8. Andreas Rauch & Serge A. Rijsdijk, 2013. "The Effects of General and Specific Human Capital on Long–Term Growth and Failure of Newly Founded Businesses," Entrepreneurship Theory and Practice, , vol. 37(4), pages 923-941, July.
    9. Kimura, Fukunari & Fujii, Takamune, 2003. "Globalizing activities and the rate of survival:: Panel data analysis on Japanese firms," Journal of the Japanese and International Economies, Elsevier, vol. 17(4), pages 538-560, December.
    10. Bates, Timothy, 2005. "Analysis of young, small firms that have closed: delineating successful from unsuccessful closures," Journal of Business Venturing, Elsevier, vol. 20(3), pages 343-358, May.
    11. Gilly, Mary C & Zeithaml, Valarie A, 1985. "The Elderly Consumer and Adoption of Technologies," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 12(3), pages 353-347, December.
    12. Schmidt, Christoph M & Zimmermann, Klaus F, 1991. "Work Characteristics, Firm Size and Wages," The Review of Economics and Statistics, MIT Press, vol. 73(4), pages 705-710, November.
    13. Veronique A.J.M. Schutjens & Egbert Wever, 2000. "Determinants of new firm success," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(2), pages 135-153.
    14. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, June.
    15. Pierre Azoulay & Benjamin F. Jones & J. Daniel Kim & Javier Miranda, 2020. "Age and High-Growth Entrepreneurship," American Economic Review: Insights, American Economic Association, vol. 2(1), pages 65-82, March.
    16. Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-1177, December.
    17. repec:bla:jindec:v:46:y:1998:i:4:p:453-88 is not listed on IDEAS
    18. Rui Baptista & Murat Karaöz & Joana Mendonça, 2014. "The impact of human capital on the early success of necessity versus opportunity-based entrepreneurs," Small Business Economics, Springer, vol. 42(4), pages 831-847, April.
    19. Ayala, Juan-Carlos & Manzano, Guadalupe, 2014. "The resilience of the entrepreneur. Influence on the success of the business. A longitudinal analysis," Journal of Economic Psychology, Elsevier, vol. 42(C), pages 126-135.
    20. Ingrid Verheul & Linda Van Mil, 2011. "What determines the growth ambition of Dutch early-stage entrepreneurs?," International Journal of Entrepreneurial Venturing, Inderscience Enterprises Ltd, vol. 3(2), pages 183-207.
    21. Jacob Mincer, 1962. "On-the-Job Training: Costs, Returns, and Some Implications," NBER Chapters, in: Investment in Human Beings, pages 50-79, National Bureau of Economic Research, Inc.
    22. Raghuram G. Rajan & Luigi Zingales, 1998. "Power in a Theory of the Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(2), pages 387-432.
    23. Christian Grund & Niels Westergaard‐Nielsen, 2008. "Age structure of the workforce and firm performance," International Journal of Manpower, Emerald Group Publishing Limited, vol. 29(5), pages 410-422, August.
    24. Dietmar Harhoff & Konrad Stahl & Michaerl Woywode, 1998. "Legal Form, Growth and Exit of West German Firms—Empirical Results for Manufacturing, Construction, Trade and Service Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 46(4), pages 453-488, December.
    25. Gary S. Becker, 1964. "Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, First Edition," NBER Books, National Bureau of Economic Research, Inc, number beck-5, June.
    26. Werner Bönte & Oliver Falck & Stephan Heblich, 2009. "The Impact of Regional Age Structure on Entrepreneurship," Economic Geography, Taylor & Francis Journals, vol. 85(3), pages 269-287, July.
    27. Jenny Meyer, 2011. "Workforce age and technology adoption in small and medium-sized service firms," Small Business Economics, Springer, vol. 37(3), pages 305-324, October.
    28. Borghans, L. & ter Weel, B.J., 2002. "Do older workers have more trouble using a computer than younger workers?," ROA Research Memorandum 1E, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    29. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    30. Robert E. Lucas Jr., 1978. "On the Size Distribution of Business Firms," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 508-523, Autumn.
    31. Joachim Wagner & Rolf Sternberg, 2004. "Start-up activities, individual characteristics, and the regional milieu: Lessons for entrepreneurship support policies from German micro data," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 38(2), pages 219-240, June.
    32. Gangaram Singh & Alex DeNoble, 2003. "Early Retirees As the Next Generation of Entrepreneurs," Entrepreneurship Theory and Practice, , vol. 27(3), pages 207-226, July.
    33. Phillip Kim & Howard Aldrich & Lisa Keister, 2006. "Access (Not) Denied: The Impact of Financial, Human, and Cultural Capital on Entrepreneurial Entryin the United States," Small Business Economics, Springer, vol. 27(1), pages 5-22, August.
    34. Lanny Herron & Harry J. Sapienza, 1992. "The Entrepreneur and the Initiation of New Venture Launch Activities," Entrepreneurship Theory and Practice, , vol. 17(1), pages 49-55, October.
    35. Paull Weber & Michael Schaper, 2004. "Understanding The Grey Entrepreneur," Journal of Enterprising Culture (JEC), World Scientific Publishing Co. Pte. Ltd., vol. 12(02), pages 147-164.
    36. Denis, David J. & Denis, Diane K., 1994. "Majority owner-managers and organizational efficiency," Journal of Corporate Finance, Elsevier, vol. 1(1), pages 91-118, March.
    37. Mahlberg, Bernhard & Freund, Inga & Crespo Cuaresma, Jesús & Prskawetz, Alexia, 2013. "The age-productivity pattern: Do location and sector affiliation matter?," The Journal of the Economics of Ageing, Elsevier, vol. 1, pages 72-82.
    38. Jacob A. Mincer, 1974. "Schooling and Earnings," NBER Chapters, in: Schooling, Experience, and Earnings, pages 41-63, National Bureau of Economic Research, Inc.
    39. Anet Weterings & Orietta Marsili, 2015. "Spatial Concentration of Industries and New Firm Exits: Does this Relationship Differ between Exits by Closure and by M&A?," Regional Studies, Taylor & Francis Journals, vol. 49(1), pages 44-58, January.
    40. P. Mueller, 2006. "Entrepreneurship in the Region: Breeding Ground for Nascent Entrepreneurs?," Small Business Economics, Springer, vol. 27(1), pages 41-58, August.
    41. BodenJR., Richard J. & Nucci, Alfred R., 2000. "On the survival prospects of men's and women's new business ventures," Journal of Business Venturing, Elsevier, vol. 15(4), pages 347-362, July.
    42. Jan de Kok & Ingrid Verheul & Abdelfatah Ichou, 2010. "New Firm Performance: Does the Age of Founders Affect Employment Creation?," Scales Research Reports H201015, EIM Business and Policy Research.
    43. Nilsson, Pia, 2016. "The influence of related and unrelated industry diversity on retail firm failure," Journal of Retailing and Consumer Services, Elsevier, vol. 28(C), pages 219-227.
    44. Gary S. Becker, 1962. "Investment in Human Capital: A Theoretical Analysis," NBER Chapters, in: Investment in Human Beings, pages 9-49, National Bureau of Economic Research, Inc.
    45. Jianakoplos, Nancy Ammon & Bernasek, Alexandra, 1998. "Are Women More Risk Averse?," Economic Inquiry, Western Economic Association International, vol. 36(4), pages 620-630, October.
    46. David G. Sirmon & Michael A. Hitt, 2003. "Managing Resources: Linking Unique Resources, Management, and Wealth Creation in Family Firms," Entrepreneurship Theory and Practice, , vol. 27(4), pages 339-358, October.
    47. Arjan Ruis & Gerard Scholman, 2012. "Ageing and entrepreneurship," Scales Research Reports H201206, EIM Business and Policy Research.
    48. Alex Coad, 2018. "Firm age: a survey," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 13-43, January.
    49. Gundry, Lisa K. & Welsch, Harold P., 2001. "The ambitious entrepreneur: High growth strategies of women-owned enterprises," Journal of Business Venturing, Elsevier, vol. 16(5), pages 453-470, September.
    50. Schimke, Antje, 2014. "Ageing workforce and firm growth in the context of “extreme” employment growth events," Structural Change and Economic Dynamics, Elsevier, vol. 30(C), pages 86-100.
    51. Karl Wennberg & Göran Lindqvist, 2010. "The effect of clusters on the survival and performance of new firms," Small Business Economics, Springer, vol. 34(3), pages 221-241, April.
    52. Forbes, Daniel P., 2005. "Are some entrepreneurs more overconfident than others?," Journal of Business Venturing, Elsevier, vol. 20(5), pages 623-640, September.
    53. Evans, David S & Leighton, Linda S, 1989. "Some Empirical Aspects of Entrepreneurship," American Economic Review, American Economic Association, vol. 79(3), pages 519-535, June.
    54. Jose-Luis Hervas-Oliver & Francisca Sempere-Ripoll & Ronald Rojas Alvarado & Sofia Estelles-Miguel, 2018. "Agglomerations and firm performance: who benefits and how much?," Regional Studies, Taylor & Francis Journals, vol. 52(3), pages 338-349, March.
    55. C. Mirjam van Praag, 2003. "Business Survival and Success of Young Small Business Owners," Tinbergen Institute Discussion Papers 03-050/3, Tinbergen Institute.
    56. Pe'er, Aviad & Keil, Thomas, 2013. "Are all startups affected similarly by clusters? Agglomeration, competition, firm heterogeneity, and survival," Journal of Business Venturing, Elsevier, vol. 28(3), pages 354-372.
    57. Andrew Henley, 2005. "Job Creation by the Self-employed: The Roles of Entrepreneurial and Financial Capital," Small Business Economics, Springer, vol. 25(2), pages 175-196, September.
    58. Scott E. Page, 2007. "Prologue to The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies," Introductory Chapters, in: The Difference: How the Power of Diversity Creates Better Groups, Firms, Schools, and Societies, Princeton University Press.
    59. James Curran & Robert A Blackburn, 2001. "Older People and the Enterprise Society: Age and Self-Employment Propensities," Work, Employment & Society, British Sociological Association, vol. 15(4), pages 889-902, December.
    60. Nancy Ammon Jianakoplos & Alexandra Bernasek, 2006. "Financial Risk Taking by Age and Birth Cohort," Southern Economic Journal, John Wiley & Sons, vol. 72(4), pages 981-1001, April.
    61. Black, Jane & de Meza, David & Jeffreys, David, 1996. "House Price, the Supply of Collateral and the Enterprise Economy," Economic Journal, Royal Economic Society, vol. 106(434), pages 60-75, January.
    62. Cooper, Arnold C. & Gimeno-Gascon, F. Javier & Woo, Carolyn Y., 1994. "Initial human and financial capital as predictors of new venture performance," Journal of Business Venturing, Elsevier, vol. 9(5), pages 371-395, September.
    63. Simon C. Parker & Yacine Belghitar, 2006. "What Happens to Nascent Entrepreneurs? An Econometric Analysis of the PSED," Small Business Economics, Springer, vol. 27(1), pages 81-101, August.
    64. Thomas Wainwright & Ewald Kibler, 2014. "Beyond financialization: older entrepreneurship and retirement planning," Journal of Economic Geography, Oxford University Press, vol. 14(4), pages 849-864.
    65. Teemu Kautonen & Erno Tornikoski & Ewald Kibler, 2011. "Entrepreneurial intentions in the third age: the impact of perceived age norms," Small Business Economics, Springer, vol. 37(2), pages 219-234, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Adji Fatou Diagne, 2024. "The Metamorphosis of Women Business Owners: A Focus on Age," Working Papers 24-71, Center for Economic Studies, U.S. Census Bureau.
    2. Huang, Yi-Hou & Liang, Woan-lih & Truong, Quang-Thai & Wang, Yanzhi, 2022. "No new tricks for old dogs? Old directors and innovation performance," Technological Forecasting and Social Change, Elsevier, vol. 179(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Backman, Mikaela & Karlsson, Charlie, 2013. "Exploration of Wisdom Ages: Firm survival," Working Paper Series in Economics and Institutions of Innovation 339, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    2. Mikaela Backman, 2013. "Who says life is over after 55? - New firm formation and an ageing population," ERSA conference papers ersa13p58, European Regional Science Association.
    3. Backman, Mikaela & Karlsson, Charlie, 2013. "Who says life is over after 55? Entrepreneurship and an aging population," Working Paper Series in Economics and Institutions of Innovation 325, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    4. Kautonen, Teemu & Kibler, Ewald & Minniti, Maria, 2017. "Late-career entrepreneurship, income and quality of life," Journal of Business Venturing, Elsevier, vol. 32(3), pages 318-333.
    5. Backman, Mikaela & Gabe, Todd & Mellander, Charlotta, 2016. "Effects of Human Capital on the Growth and Survival of Swedish Businesses," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 46(1).
    6. Kameliia Petrova, 2012. "Part-time entrepreneurship and financial constraints: evidence from the Panel Study of Entrepreneurial Dynamics," Small Business Economics, Springer, vol. 39(2), pages 473-493, September.
    7. Wyrwich, Michael, 2013. "Can socioeconomic heritage produce a lost generation with regard to entrepreneurship?," Journal of Business Venturing, Elsevier, vol. 28(5), pages 667-682.
    8. Erik Stam & David Audretsch & Joris Meijaard, 2009. "Renascent entrepreneurship," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 223-237, Springer.
      • Stam, F.C. & Audretsch, D.B. & Meijaard, J., 2006. "Renascent Entrepreneurship," ERIM Report Series Research in Management ERS-2006-017-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    9. Metzger, Georg, 2007. "Personal Experience: A Most Vicious and Limited Circle!? On the Role of Entrepreneurial Experience for Firm Survival," ZEW Discussion Papers 07-046 [rev.], ZEW - Leibniz Centre for European Economic Research.
    10. Jose Maria Millan & Emilio Congregado & Concepcion Roman & Mirjam van Praag & Andre van Stel, 2011. "The Value of an Educated Population for an Individual's Entrepreneurship Success," Tinbergen Institute Discussion Papers 11-066/3, Tinbergen Institute, revised 06 May 2014.
    11. Murmann, Martin & Salmivaara, Virva & Kibler, Ewald, 2023. "How does late-career entrepreneurship relate to innovation?," Research Policy, Elsevier, vol. 52(6).
    12. André van Stel & Ingrid Verheul, 2007. "Entrepreneurial diversity and economic growth," Scales Research Reports H200701, EIM Business and Policy Research.
    13. Millán, José María & Congregado, Emilio & Román, Concepción, 2014. "Persistence in entrepreneurship and its implications for the European entrepreneurial promotion policy," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 83-106.
    14. Deniz Ucbasaran & Paul Westhead & Mike Wright, 2008. "Opportunity Identification and Pursuit: Does an Entrepreneur’s Human Capital Matter?," Small Business Economics, Springer, vol. 30(2), pages 153-173, February.
    15. Erik Stam & Roy Thurik & Peter van der Zwan, 2010. "Entrepreneurial exit in real and imagined markets," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 19(4), pages 1109-1139, August.
    16. Ornella Wanda Maietta & Fernanda Mazzotta, 2018. "Firm Survival and Innovation: Knowledge Context Matters!," CSEF Working Papers 496, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    17. Paul A. Coomes & Jose Fernandez & Stephan F. Gohmann, 2013. "The Rate of Proprietorship Among Metropolitan Areas: The Impact of the Local Economic Environment and Capital Resources," Entrepreneurship Theory and Practice, , vol. 37(4), pages 745-770, July.
    18. Baptista, Rui & Lima, Francisco & Preto, Miguel Torres, 2012. "How former business owners fare in the labor market? Job assignment and earnings," European Economic Review, Elsevier, vol. 56(2), pages 263-276.
    19. Francine Lafontaine & Marek Zapletal & Xu Zhang, 2019. "Brighter prospects? Assessing the franchise advantage using census data," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 175-197, April.
    20. repec:eee:labchp:v:3:y:1999:i:pb:p:2373-2437 is not listed on IDEAS
    21. Ingrid Verheul & Martin Carree & Roy Thurik, 2009. "Allocation and productivity of time in new ventures of female and male entrepreneurs," Small Business Economics, Springer, vol. 33(3), pages 273-291, October.

    More about this item

    Keywords

    Age; Operational manager; Employees; Firm survival; Firm size; Firm age;
    All these keywords.

    JEL classification:

    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:joecag:v:15:y:2020:i:c:s2212828x19301021. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/the-journal-of-the-economics-of-ageing .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.