University of Westminster

Age  

 

The relationship between the age of the firm and its performance has been much of an interest for many 

researchers in both economics and finance field and there is a plenty of academic research undertaken on this 

phenomenon. The literature available suggests that there are two types of views about the impact of age on firm 

performance. Some researchers believe that the older the firm, the better they perform as they have more 

experience in the field. In economics, this phenomenon is called “learning by doing” (Coad et al. 2013). On the 

other hand, some other papers suggest that older firms cannot adjust to new changes in the industry and 

therefore underperform younger ones (Barron et al. 1994).  

 

In most of the literature the firms size and age come together. In some papers the authors include the firm age 

as a control variable while some other include it as the main variable. Majumdar (1997) conducted empirical 

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