The Firm Life Cycle and Debt Maturity Structure: Evidence from ASEAN Countries

Abstract

This study aims to examine the firm’s debt maturity structure policy across the firm life cycle stage in five ASEAN countries, namely Indonesia, Malaysia, Singapore, Thailand and Vietnam. The Firm life cycle stages are classified based on its cashflow pattern into four stages, namely introduction, growth, mature, and decline. The study was conducted using 2769 samples of non-financial listed companies in these five ASEAN countries in the period 2007-2020. The data analysis method used is a panel data model with a fixed effect. The results of the study from the research conducted show that the company's life cycle in the introduction and growth stages chooses to use long-term debt compared to companies in the mature and decline stages. It’s possible that during introduction and growth stages, firms are overloaded with many investment opportunities that they want to invest. Internal funds might not be enough for them and they opt to acquire external debt such as long-term debt. DOI: 10.26905/jkdp.v27i2.9958