Journal of Banking & Finance Vol. 69 2016
Do corporate policies follow a life-cycle?
open access
Abstract
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.
- DOI
- 10.1016/j.jbankfin.2016.04.009
- Volume
- 69
- Pages
- 95-107
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib