The lifespan of small and medium-sized enterprises in China: Stylized facts and influencing factors
利用中国最全面的企业注册数据库，提出基于注册资本的中小企业新分类标准，估算其寿命中位数为10.67年，并分析区域和个体因素对退出风险的影响。
Small and medium-sized enterprises (SMEs) are crucial to China's economic development and the lifespan of SMEs matters both for entrepreneurs and policy makers. The Business Registry Database (BRD), China's most comprehensive firm-level administrative dataset, offers unique opportunities for analysis but lacks variables required by the official SME definition. We address this gap by introducing a new classification standard based on registered capital, setting the SME threshold at less than 32 million yuan—the first such approach in the literature. Using this definition, we examine firms registered between 2001 and 2013 and estimate SME's lifespan via the Kaplan–Meier method. Median lifespan is 10.67 years across all SMEs and 5.03 years among exited firms, providing the first large-scale benchmark for China. We then provide a comprehensive analysis of both regional and firm-level determinants of SME exit. Favorable regional environments significantly reduce exit risks, while firm-level characteristics—particularly smaller scale and state ownership—remain key sources of vulnerability. Our findings underscore the importance of both institutional and structural conditions in shaping firm survival. By establishing a workable SME definition for the BRD and identifying key regional and firm-level drivers of exit, this study provides a new empirical basis for research on China's private sector dynamics. Policy implications point to the need for a balanced approach: while market forces can spur competition, regional development policies and institutional support are critical for sustaining SME growth and longevity.