THE STAGES OF FIRM LIFE CYCLE AND CAPITAL STRUCTURE RATIOS FOR COMPANIES OF INDUSTRY
This paper presents research on the dependency between the particular stages of a firm’s life cycle and selected capital structure ratios. The findings are in line with the pecking order theory of capital structure, stating that early stages of a firm’s life cycle should be characterised by the tend...
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| Format: | Article |
| Language: | English |
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Wydawnictwo SGGW - Warsaw University of Life Sciences Press
2020-06-01
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| Series: | Polityki Europejskie, Finanse i Marketing |
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| Online Access: | https://pefim.sggw.pl/article/view/3488 |
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| author | Mirosław Wasilewski Joanna Żurakowska |
| author_facet | Mirosław Wasilewski Joanna Żurakowska |
| author_sort | Mirosław Wasilewski |
| collection | DOAJ |
| description | This paper presents research on the dependency between the particular stages of a firm’s life cycle and selected capital structure ratios. The findings are in line with the pecking order theory of capital structure, stating that early stages of a firm’s life cycle should be characterised by the tendency for financing through debt. However, this stands in opposition to both the trade-off theory, and the research conducted on several Polish companies. The enterprises in their stages of introduction and growth were characterised by a substantially lower level of total assets to shareholders' equity ratio in their sources of finance, when compared to those in the shake-out stage. The companies in their growth stage were marked by a significantly higher level in the share of long-term commitments in sources of finance, as compared to the enterprises in their maturity, shake-out and decline stage. Also, the introduction stage showed a significantly higher level in the share of short-term commitments in sources of finance, in comparison with those being in their growth, maturity, and shake-out stage. |
| format | Article |
| id | doaj-art-c056a2e1064d44108216f9ea52632a0b |
| institution | Kabale University |
| issn | 2081-3430 2544-0640 |
| language | English |
| publishDate | 2020-06-01 |
| publisher | Wydawnictwo SGGW - Warsaw University of Life Sciences Press |
| record_format | Article |
| series | Polityki Europejskie, Finanse i Marketing |
| spelling | doaj-art-c056a2e1064d44108216f9ea52632a0b2025-02-02T01:39:14ZengWydawnictwo SGGW - Warsaw University of Life Sciences PressPolityki Europejskie, Finanse i Marketing2081-34302544-06402020-06-0123(72)10.22630/PEFIM.2020.23.72.21THE STAGES OF FIRM LIFE CYCLE AND CAPITAL STRUCTURE RATIOS FOR COMPANIES OF INDUSTRYMirosław Wasilewski0Joanna Żurakowska1Warsaw University of Life Science – SGGW Pope John Paul II State School of Higher Education in Biała Podlaska This paper presents research on the dependency between the particular stages of a firm’s life cycle and selected capital structure ratios. The findings are in line with the pecking order theory of capital structure, stating that early stages of a firm’s life cycle should be characterised by the tendency for financing through debt. However, this stands in opposition to both the trade-off theory, and the research conducted on several Polish companies. The enterprises in their stages of introduction and growth were characterised by a substantially lower level of total assets to shareholders' equity ratio in their sources of finance, when compared to those in the shake-out stage. The companies in their growth stage were marked by a significantly higher level in the share of long-term commitments in sources of finance, as compared to the enterprises in their maturity, shake-out and decline stage. Also, the introduction stage showed a significantly higher level in the share of short-term commitments in sources of finance, in comparison with those being in their growth, maturity, and shake-out stage.https://pefim.sggw.pl/article/view/3488industry companiesfirm life cyclecapital structure |
| spellingShingle | Mirosław Wasilewski Joanna Żurakowska THE STAGES OF FIRM LIFE CYCLE AND CAPITAL STRUCTURE RATIOS FOR COMPANIES OF INDUSTRY Polityki Europejskie, Finanse i Marketing industry companies firm life cycle capital structure |
| title | THE STAGES OF FIRM LIFE CYCLE AND CAPITAL STRUCTURE RATIOS FOR COMPANIES OF INDUSTRY |
| title_full | THE STAGES OF FIRM LIFE CYCLE AND CAPITAL STRUCTURE RATIOS FOR COMPANIES OF INDUSTRY |
| title_fullStr | THE STAGES OF FIRM LIFE CYCLE AND CAPITAL STRUCTURE RATIOS FOR COMPANIES OF INDUSTRY |
| title_full_unstemmed | THE STAGES OF FIRM LIFE CYCLE AND CAPITAL STRUCTURE RATIOS FOR COMPANIES OF INDUSTRY |
| title_short | THE STAGES OF FIRM LIFE CYCLE AND CAPITAL STRUCTURE RATIOS FOR COMPANIES OF INDUSTRY |
| title_sort | stages of firm life cycle and capital structure ratios for companies of industry |
| topic | industry companies firm life cycle capital structure |
| url | https://pefim.sggw.pl/article/view/3488 |
| work_keys_str_mv | AT mirosławwasilewski thestagesoffirmlifecycleandcapitalstructureratiosforcompaniesofindustry AT joannazurakowska thestagesoffirmlifecycleandcapitalstructureratiosforcompaniesofindustry AT mirosławwasilewski stagesoffirmlifecycleandcapitalstructureratiosforcompaniesofindustry AT joannazurakowska stagesoffirmlifecycleandcapitalstructureratiosforcompaniesofindustry |