Work

The Pecking Order Theory and the Firm's Life Cycle

Year: 2009

Type: preprint

Abstract: We examine the central prediction of the pecking order theory of financing among firms in two distinct life cycle stages, namely growth and maturity. We find that within a life cycle stage, where levels of debt capacity and external financing needs are more homogeneous, and after sufficiently controlling for debt capacity constraints, firms with high adverse selection costs follow the pecking order more closely, consistent with the theory.

Source: SSRN Electronic Journal

Authors: Laarni T. Bulan, Zhipeng Yan

Institutions: Cornerstone Research Group (United States), New Jersey Institute of Technology

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2105589106

Cites: 15

Cited by: 16

Related to: 10