You are here

Founding conditions, learning and the survival of productive and unproductive young firms

29 May 2024
2:00 pm
San Francesco Complex - Classroom 2

It is well known that the probability of exiting the market decreases with the age of the firm, and that longer-lived firms are more productive than short-lived ones.

However, unproductive firms (e.g., zombie firms, lifestyle firms) can survive for a long time as well.

We advance two theories of new firm survival – noisy learning and capability learning – with contingencies to predict and explain the survival of productive and unproductive new firms using rich administrative data on the population of newly incorporated firms in the Netherlands in the 2006-2021 period.

In particular, we apply the framework laid out in Mueller and Spinnewijn (2023) to quantify the heterogeneity in firm survival probabilities and their development over time and interpret this with firm learning theories.


Join at:

Mark Kattenberg, CPB Netherlands