Computing age of firms in the Compustat Global database
Posted: 04 June 2015 03:47 AM   [ Ignore ]
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Hi,

I am new to the Compustat databases, so I am still discovering many of the features. I want to download the age of some of the firms in the Compustat Global Database. Is there a variable/identifier that I need to query for? If not, is there some way in which I can compute the age?

Thanks for any pointers,
Sarada

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Posted: 04 June 2015 08:46 PM   [ Ignore ]   [ # 1 ]
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hi Sarada,

A typical proxy for age is the number of firms is listed. I am not entirely sure if end of year stock price is on Compustat Global, but if so, you could use that year as the IPO year. A given year minus the IPO year would be firm age. Obviously, the firm will have existed before that time, but that info is not generally available. (For US firms Jay Ritter has data on the ‘real’ firm age (year of incorporation); for non-US firms I am not aware of a dataset like that).

Hope this helps,

Joost

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Posted: 05 June 2015 02:02 AM   [ Ignore ]   [ # 2 ]
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Thanks Joost! I’ll see if I can get sufficient observations using this workaround.

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Posted: 27 July 2015 05:28 AM   [ Ignore ]   [ # 3 ]
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Hi,

I am interested in include firm age as control variable for my study as well. Roaming through prior studies I discovered many of them using the Date Company First Time on Compustat Database (can be found under mnemonic START). START item is available through Compustat Classic database. I hope this could solve your problem.

I would appreciate if you could provide me with a way to extract it, as I am subscribed to Compustat North-America and cannot find an avenue to extract this item for my study.

Antonis

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regards,

Antonis Chantziaras

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Posted: 27 July 2015 09:03 AM   [ Ignore ]   [ # 4 ]
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hi Antonis,

Do you need firm age for US firms, or for global firms? In Compustat Fundamental Annual you can select the first year with a non-missing prcc_f field (end of year stock price). This should be the end of year of the first listed year. In Compustat Company there is also an ipo-date (often missing though).

Best,

Joost

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Posted: 27 July 2015 09:46 AM   [ Ignore ]   [ # 5 ]
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Hi Joost,

your quick response is of great help for me. Unfortunately, your suggestion partially meets my requirements as I am interested in both public and private US firms. The prcc_f field (end of year stock price) fits only for the listed companies.
I have found that Compustat provides the Date Company First Time on Compustat Database (under mnemonic START). The availability of data is from 1987 and onwards and the definition they provide is:
“This item shows the production date of the core database when a company first appeared in Compustat North America. You can use this item to avoid backfilled data from company additions. This item is only available in the Compustat Classic database.”
Although this item is available in Compustat North America, whet I extract it - for all US companies covered by the database- I come up with all values missing. I am not aware if my using “Research insight 8.4.1” tool generates this issue or not. Any comments on this are welcome.

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regards,

Antonis Chantziaras

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Posted: 27 July 2015 02:39 PM   [ Ignore ]   [ # 6 ]
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hi Antonis,

That is curious: I am using variable search (https://wrds-web.wharton.upenn.edu/wrds/research/variable.cfm) in WRDS and searched all Compustat tables for any variables containing ‘start’ (or ‘First Time’), but the variable you mention does not show up.

The ‘names’ dataset (https://wrds-web.wharton.upenn.edu/wrds/tools/variable.cfm?library_id=129&file_id=65815) however does have a ‘year1’ variable (First Fiscal Year of Available Accounting Data). I believe this variable is well-populated (didn’t check though).

Hope this helps,

Joost

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Posted: 28 July 2015 01:32 AM   [ Ignore ]   [ # 7 ]
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Hi Joost,
this last information is exactly what I was looking for. It has excellent coverage for my sample and I will definitely use it as an age proxy! Many thanks for your suggestion, greatly appreciated!

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regards,

Antonis Chantziaras

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Posted: 28 July 2015 06:43 AM   [ Ignore ]   [ # 8 ]
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Great! I’m glad it worked out!

Joost

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