Do Corporate Policies Follow a Life-Cycle?

By R. Faff, Wing Chun Kwok, Edward J. Podolski, George Wong. 2016

198 citations recorded by the source corpus.

We examine whether corporate investment, financing, and cash policies are interdependent and follow a predictable pattern in line with the firm life-cycle. We find that investments and equity issuance decrease with firm life-cycle, while debt issuance and cash holdings increase in the introduction and growth stages and decrease in the mature and shake-out/decline stages of the firm’s life-cycle. These results are robust after using various proxies for life-cycle and controlling for firm, CEO and board level characteristics. Collectively, our results show that corporate policies follow a firm life-cycle.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/ac72eb9638d388b154da567b93d56cc5542b8dea

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Mostafa Monzur Hasan
2. Ahsan Jamal Akbar
3. A. Cheung
4. Zanxin Wang
5. Minhas Akbar

In Finance

1. A. Cheung
2. Zanxin Wang
3. Mostafa Monzur Hasan

In Strategy and Management

1. Mostafa Monzur Hasan
2. Ahsan Jamal Akbar
3. A. Cheung
4. Zanxin Wang
5. Minhas Akbar

Citations in the corpus

• The Interplay between Working Capital Management and a Firm’s Financial Performance across the Corporate Life Cycle (2020, background): “[25] assert that a firm’s investment, financing, and cash policies are interlinked and changes in line with its life cycle.”
• Organization capital and firm life cycle (2018, background): “…1998), dividend payout policy (e.g. DeAngelo et al. 2006; Fama and French 2001), secondary equity offerings (DeAngelo et al. 2010), cash holdings (Faff et al. 2016), acquisition rate and corresponding benefits (Arikan and Stulz 2016), firm risk taking (Habib and Hasan 2017), the cost of capital…”