Maximum likelihood – Stephen Kinsella

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The Age Distribution of Firms in Ireland, 1960-2009

28/10/2009 | Stephen | Research, Papers, Research | Biology, Business, Education, Empirical, Evolution, Maximum likelihood, Social Sciences, Statistics

Abstract. This paper studies the age distribution of firms in Ireland from 1961 to 2009 using data on over 159,000 firms. I build a model which mixes a lognormal distribution of firm size with an exponential distribution of firm age to explain the evolution of these data. The model is fitted using maximum likelihood estimation, and tested using Kolmogorov-Smirnov statistics. The model replicates observed empirical regularities.

Keywords: Firm Age, Firm Size, Firm Growth.
JEL Codes: L20; L25; L26.