The role of life cycle on the firm’s capital structure = El papel del ciclo de vida en la estructura de capital de la empresa

Castro, Paula; Fernández, María Teresa Tascón; Tapia, Borja Amor

doi:10.18002/pec.v0i19.3585

Cited by 1 publication

(2 citation statements)

References 35 publications

(63 reference statements)

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“…In other words, the firm will use internal cash flows for financing investment projects with positive net present value in order to minimize signaling problems (Bhaird & Lucey, 2007). So, the theory predicts that the firm will first use retained earnings, after that debt and lastly issuing stock (La Rocca et al, 2009).…”

Section: Pecking Order Theorymentioning

confidence: 99%

“…From the above mentioned the conclusion is that the use of debt will become larger during the life of the firm because small and medium firms will not have as good access to significant financial resources as do big corporations have (La Rocca et al, 2009). Firms will, according to the capital structure life stage theory have a trajectory of leverage low-high-low during their development (Frielinghaus et al, 2005).…”

Section: Capital Structure Life Stage Theorymentioning

confidence: 99%

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Crowdfunding in a Context of Financing Firms Through Their Life Cycle

Horvatinović

Орсаг

2018

Zagreb International Review of Economics and Business

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In this paper we first present some developed theories of financing that firms might accord with in their development stages. The framework, assumptions and predictions of the capital structure of firms in each theory is shown. Afterwards, crowdfunding, as a fairly new source of financing that is increasing significance, is described and is differentiated on the basis of the type of return on investment for the outside investors. In recent literature there have been models that introduce crowdfunding in the framework of financing firms through their life cycle stages. We point the difficulty of encompassing crowdfunding in the mentioned models because of characteristics that are unique to it from the perspective of the investor and the firm. While it is not surprising that crowdfunding is used in development stages, these characteristics make it difficult to construct a model of financing firms that has traditional means of financing and crowdfunding.

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Section: Pecking Order Theorymentioning

confidence: 99%

Section: Capital Structure Life Stage Theorymentioning

confidence: 99%