Corporate cash and the Firm's life-cycle: Evidence from dual-class firms

Lin, James Juichia; Shi, Wei-Zhong; Tsai, Li-Fang; Yu, Min‐Teh

doi:10.1016/j.iref.2022.02.006

Cited by 7 publications

(2 citation statements)

References 45 publications

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“…Habib and Hasan (2019) argue that firm life cycle strongly correlates with actual outcomes and decisions like cash holdings and tax planning. Some studies (e.g., Hauser and Thornton Jr, 2016;Lin et al 2022) focused on one stage only when testing the impact of firm's life cycle on cash holding. Moreover, Saddour, (2006) focused on two stages.…”

Section: -4 the Relation Between Firm's Life Cycle And Cash Holdingsmentioning

confidence: 99%

“…They found increasing cash level in the introduction and growth, and a decrease in the remaining three stages. Consequently, Lin et al (2022) conducted a study to test the relationship between firm's life cycle and cash holdings from the perspective of dual class ownership structure. Using 6077 non-financial American companies during 1994-2002. The authors focused on the mature stage, which is only measured by firm's age.…”

Section: -4 the Relation Between Firm's Life Cycle And Cash Holdingsmentioning

confidence: 99%

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أثر التجنب الضریبی ودورة حیاة الشركة على الاحتفاظ بالنقدیة: دلیل من سوق الأوراق المالیة المصری(باللغة الانجلیزیة)

الداوایاتی¹

2022

مجلة الاسکندریة للبحوث المحاسبیة

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This research aims to investigate the impact of tax avoidance and firm life cycle on cash holdings for a sample of 126 non-financials companies listed on the Egyptian stock market with 711 observations for the period 2012 -2019. Tax avoidance, the first independent variable is measured by two proxies: the current effective tax rate (ETR), and book tax difference ratio (BTD). For the second independent variable, firm's life cycle, the cash flow approach is used to capture the five stages of the life cycle. Turning to the cash holdings as the dependent variable, two indicators are used. The first main indicator is Ln cash ratio calculated by taking the natural logarithm of cash and cash equivalents to total assets. The second indicator is used in the robustness test, which is calculated as the natural logarithm of cash and cash equivalents divided by total assets minus cash and cash equivalents. The results elaborated that there is a significant negative relationship between tax avoidance measured by the two proxies and cash holdings measured by the two indicators. Additionally, the findings displayed that the introduction stage of the firm's life cycle has a significant negative impact on cash holdings and a significant positive effect of shake-out stage on cash holdings while there is no relationship between the growth, mature and decline stages and cash holdings. The statistical tests are repeated for all variables using the second indicator of cash holding and the same results are obtained. Beyond these tests, for more analysis the research sample is divided into five subsamples presented the five stages of firm's life cycle. The results showed that higher negative impact of tax avoidance on cash holdings lies in the shake-out and the decline stages. On the other side, no impact of tax avoidance on cash holdings in the remaining stages.

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Section: -4 the Relation Between Firm's Life Cycle And Cash Holdingsmentioning

confidence: 99%

Section: -4 the Relation Between Firm's Life Cycle And Cash Holdingsmentioning

confidence: 99%

أثر التجنب الضریبی ودورة حیاة الشركة على الاحتفاظ بالنقدیة: دلیل من سوق الأوراق المالیة المصری(باللغة الانجلیزیة)

الداوایاتی¹

2022

مجلة الاسکندریة للبحوث المحاسبیة

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Does the firm's life cycle matter in the relationship between short‐term debt and investment efficiency?

Abuhommous

2024

Int. J Fin Econ

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In this paper, we investigate the role of short‐term debt in investment efficiency, and we examine the impact of the firm's life cycle stages on this relationship. Using data from non‐financial companies in the United States from 1971 to 2021, we argue that the short‐term debt may reduce the information asymmetries and discipline the management decisions, thus improving the investment efficiency. We argue, however, that the relationship varies throughout different life cycle stages. We find that short‐term debt positively influences investment efficiency and over‐investment. Furthermore, the firm's life cycle significantly impacts investment efficiency, with the introduction and growth stages negatively associated with it. The life cycle also affects the relationship between short‐term debt and investment efficiency, particularly during the growth stage. These results emphasis the role of short‐term debt and the firm's life cycle in mitigating information asymmetries and shaping management behaviour.

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Impact of information disclosure ratings on investment efficiency: evidence from China

Chen

et al. 2022

Rev Quant Finan Acc

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Corporate cash and the Firm's life-cycle: Evidence from dual-class firms

Cited by 7 publications

References 45 publications

أثر التجنب الضریبی ودورة حیاة الشركة على الاحتفاظ بالنقدیة: دلیل من سوق الأوراق المالیة المصری(باللغة الانجلیزیة)

أثر التجنب الضریبی ودورة حیاة الشركة على الاحتفاظ بالنقدیة: دلیل من سوق الأوراق المالیة المصری(باللغة الانجلیزیة)

Does the firm's life cycle matter in the relationship between short‐term debt and investment efficiency?

Impact of information disclosure ratings on investment efficiency: evidence from China

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