Companies Life Cycle Stages and Capital Structure in Emerging Markets: Evidence from Iran

Salehi, Mahdi (Accounting Department, Ferdowsi University of Mashhad)
Rostami, Vahab (Department of Economics and Social Science, Payame Noor University)
Salmanian, Lida (Accounting Department, Islamic Azad University, Zanjan Sciences & Research Branch)

Salehi, Mahdi, Rostami, Vahab, & Salmanian, Lida. (2013). Companies Life Cycle Stages and Capital Structure in Emerging Markets: Evidence from Iran. The Journal of Distribution Science(JDS), 11(2), 5-10, https://doi.org/https://doi.org/10.15722/jds.11.2.201302.5

복사

Abstract

Purpose - The current research examines the effect of life cycle stages on capital structure of listed companies in Tehran Stock Exchange. Research design, data, methodology - By aid of 685 year-company data, which collected from financial statements of companies during 2006-2012, first, the companies, are classified into three groups including companies in growth, maturity and decline stages. After removing the companies, which were not in accordance with life cycle model, 86 companies were selected to test two main hypotheses of the research. Results - The results show that the capital structure of the sample companies is different in various life cycle stages. More investigation by LSD test also revealed that the total debt to total assets ratio means of the companies in growth stages were significantly different from those companies in maturity stages and those in growth stages had high level of debt to assets ratio. Conclusions - The result showed the average amount of the working capital for companies in three stages are significantly different and due to high level of operation of the companies in maturity and decline stages, these companies held high amount of working capital than those in the growth stages.

keywords: Life Cycle Stages, Optimal Capital Structure, Leverage Ratios, Working Capital Management

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Vol.11 No.2

Companies Life Cycle Stages and Capital Structure in Emerging Markets: Evidence from Iran

Companies Life Cycle Stages and Capital Structure in Emerging Markets: Evidence from Iran

Abstract

참고문헌

The Journal of Distribution Science(JDS)