Tests of the Pecking Order Theory and the Firm Life Cycle

Bulan, Laarni T.; Yan, Zhipeng

doi:10.2139/ssrn.1347430

Cited by 29 publications

(49 citation statements)

References 31 publications

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“…Starting with Berger and Udell [1998] a number of studies illustrate the importance of controlling for a firm's life-cycle stage (see e.g. Cole [2008] and Bulan and Yan [2009]). These studies acknowledge that financing choices evolve over time with the firm's changing characteristics but also stress the importance of the initial conditions and prior financing decisions.…”

Section: Introductionmentioning

confidence: 99%

“…When analyzing data of firms at different stages of their life-cycle, Bulan and Yan [2009] show that the impact of certain classic determinants like, for example, profitability is not monotonic across different stages of the firm's life-cycle. This underlines the importance to control for the development stage when making capital structure analysis.…”

Section: Introductionmentioning

confidence: 99%

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Financing Decisions Along a Firm's Life-Cycle: Debt as a Commitment Device

Hirsch

Walz

2009

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractWe analyze the life-cycle patterns of a firm's financing decisions and their interaction with future growth and development decisions. The framework derives three different financing sequences (debt-debt, equity-debt, equity-equity financing) which we link to existing empirical research. Furthermore, by adopting a life-cycle approach we are able to go one step beyond existing empirical research and derive testable hypotheses with respect to differences in the financing decisions of firms due to project, firm, market and country characteristics as well as the impact of a possible lack of start-up financing possibilities on firm dynamics.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Financing Decisions Along a Firm's Life-Cycle: Debt as a Commitment Device

Hirsch

Walz

2009

SSRN Journal

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“…Bianconi and Tan (2009) 12. Bulan and Yan (2009) use a firm's dividend initiation history as a measure of corporate life-cycle.…”

Section: Resultsmentioning

confidence: 99%

When does corporate governance matter? Evidence from across the corporate life-cycle

O’Connor

Byrne

2015

Managerial Finance

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Purpose -The purpose of this paper is to explore the relationship between corporate governance and firm value at different stages of the corporate life-cycle. Design/methodology/approach -The authors use two measures, commonly employed in the literature, to differentiate between "immature" and "mature" firms, and estimate separate governance-value regressions for each set of firms. Findings -The findings suggest that it is differences in the resource/strategic governance functions, which manifest in young firms which result in differences in value across firms, all else equal. The authors find no relationship between governance and firm value for older firms. Hence, differences in the monitoring aspect of governance between mature firms are not rewarded with a value premium.Research limitations/implications -The findings imply that the strategic and resource roles of governance are "must haves" for firms since firms that score highly on these fronts are valued more highly. In contrast, differences in the monitoring aspect of governance are not rewarded, suggesting that effective monitoring is not a necessity, but rather a "nice to have". The analysis is limited to a small sample of emerging market firms, and it would be of interest to extend this analysis to a larger and broader sample of firms. Originality/value -The findings suggest that corporate governance is not valued at all stages of the corporate life-cycle.

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“…In compliance with the theory of the hierarchy of financing sources, enterprises which implement investment projects, try to finance them firstly from the profit they generate [Bulan, Zhipeng, 2007]. Therefore, investments of companies which allocate internal capitals should have a negative impact on the possibility to pay out the dividend.…”

Section: Selection Of Companies For the Studymentioning

confidence: 99%

Identification and Analysis of Financial Determinants of the Dividend Policy of Companies Quoted on Warsaw Stock Exchange in 2002–2013

Kuczowic

Jabłoński

2016

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Tests of the Pecking Order Theory and the Firm Life Cycle

Cited by 29 publications

References 31 publications

Financing Decisions Along a Firm's Life-Cycle: Debt as a Commitment Device

Financing Decisions Along a Firm's Life-Cycle: Debt as a Commitment Device

When does corporate governance matter? Evidence from across the corporate life-cycle

Identification and Analysis of Financial Determinants of the Dividend Policy of Companies Quoted on Warsaw Stock Exchange in 2002–2013

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