Abstract
In this study, we investigated around one million pieces of Japanese firm-size data, which are included in the database ORBIS, and confirmed that the age distribution of firms approximately obeys an exponential function. We estimated the decay rate of firms by comparing their activities in 2008 and 2013 and found that it does not depend on firm age and can be regarded to be constant. Here, decay rate of firms denotes the state transition probability of firm activities. These two observations are qualitatively consistent when the number of newly founded firms is nearly constant. This phenomenon is analogous to nuclear decay. We quantitatively confirmed this consistency by comparing the parameters of exponential age distribution with the decay rate of firm activities. At the same time, using this result, we estimated the number of firms founded annually and the decay rate of firm activities in Japan before World War II.
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