Analyzing firm mortality using life table techniques

The mortality of German joint stock companies is investigated using life table techniques. An EDB-distribution or Hjorth-distribution and an exponential distribution are fitted to the hazard rates, whereby the population is divided into small and large firms. Survivor functions and life expectancy functions are presented. The life expectancy of all firms is circa 40 years. In the absence of data, it is recommended that the life expectancy of a firm be estimated as the reciprocal value of the proportion of firms that have disappeared from the market.