How much do we know about the dynamics of firms in the complex economy? Are there stochastic laws hidden behind the observables? The goal of this study is to supply both theoretical and empirical foundations for delivering a better understanding of how firms evolve due to the dynamics.

A recent breakthrough in firm dynamics is the discovery of several statistical regularities among firms. Regardless of time, country and industry, many empirical observations have been suggesting that the distributions of several measures of firms are alike. There is a great interest in understanding the reason behind the regularities. Yet, despite years of research, a tremendous number of unknowns remain and the nature of firms is yet to be explored.

This thesis will offer theoretical and empirical foundations for the future development of firm dynamics. In this work, we will focus on the detail of the statistical regularities and the universal dynamics among all business firms, with the support of an unprecedented amount of empirical data and a high-precision nonparametric probability density estimator. In particular, two regularities of the dynamics, namely failure rate and growth, will be thoroughly studied, and explanations to the observed distributions will be derived from the fundamental: the statistical properties of the empirical observations.