Does the firm's life cycle matter in the relationship between short‐term debt and investment efficiency?
Ala'a Adden Awni Abuhommous
Abstract: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 deb… Show more
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