Do corporate policies follow a life-cycle?
Wing Chun Kwok,
Edward Podolski () and
Journal of Banking & Finance, 2016, vol. 69, issue C, 95-107
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.
Keywords: Life-cycle theory; Investment decisions; Financing decisions; Cash policy (search for similar items in EconPapers)
JEL-codes: G30 G31 G32 G35 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:69:y:2016:i:c:p:95-107
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