Earticle

초록

영어

In this study, I present evidence of a distinctive inverted-U-shaped relation between leverage and financial life cycle stage. By using the magnitude of retained earnings (RE) as a proxy for a firm’s life cycle stage, I find that the debt-to-equity ratio tends to be low for low-RE firms, high for medium-RE firms, and low for high-RE firms in all seven major countries under study. My evidence suggests that (i) early-stage firms have low leverage because they rely mostly on equity financing as a result of financial constraints, (ii) growth-stage firms have high leverage because they actively use debt to meet funding requirements for growth, and (iii) mature- stage firms have low leverage because they passively accumulate internal equity. Finally, it appears that this inverted-U-shaped relation is related to the free-cash-flow problem for high-RE firms in that, despite relatively slow growth prospects, those firms engage in heavy capital investments using large operating cash flows.

목차

Abstract
 1. Introduction
 2. Data
 3. Empirical Results
  3.1. Inverted-U-shaped relation between retained earnings and leverage
  3.2. Quadratic regression model
  3.3. Leverage and other proxies for financial life cycle stage
  3.4. Asset growth rate and its components over financial life cycle
  3.5. Variation of key firm characteristics over financial life cycle
 4. Concluding remarks
 Appendix
 References
 Table
 Figure

키워드

저자

• Jungwon Suh [ College of Business Administration, Ewha Womans University, Seoul, Korea, ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330