Business life cycle and capital structure : evidence from Chinese manufacturing firms
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This paper uses a panel data-fixed effect approach and data collected from Chinese public manufacturing firms between 1999 and 2011 to investigate the impacts of business life cycle stages on capital structure. We find that cash flow patterns capture more information on business life cycle stages than firm age and have a stronger impact on capital structure decision-making. We also find that the adjustment speed of capital structure varies significantly across life cycle stages and that non-sequential transitions over life cycle stages play an important role in the determination of capital structure. Our study indicates that it is important that policy-makers ensure that product and financial markets are well-balanced.
Tian , L , Han , L & Zhang , S 2015 , ' Business life cycle and capital structure : evidence from Chinese manufacturing firms ' , China & World Economy , vol. 23 , no. 2 , pp. 22-39 . https://doi.org/10.1111/cwe.12105
China & World Economy
Copyright © 2015 Institute of World Economics and Politics, Chinese Academy of Social Sciences. This work has been made available online in accordance with publisher policies or with permission. Permission for further reuse of this content should be sought from the publisher or the rights holder. This is the author created accepted manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://doi.org10.1111/cwe.12105
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