Organization Capital and Firm Life Cycle
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Date
2017-12-13
Authors
Hasan, Mostafa Monzur
Cheung, Adrian (Wai-Kong)
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier
Rights
© 2017 Elsevier B.V.
Rights Holder
Elsevier B.V.
Abstract
We hypothesize, and examine empirically, two types of association between organization capital and firm life cycle. Are firms with high organization capital more likely to be in a particular stage of their life cycle than firms with low organization capital? Are firms' transitions from one life cycle stage to another over time associated with how much they invest in organization capital? Our findings suggest that firms with high (low) organization capital are more likely to be in the introduction and decline (growth and maturity) stages. Our results also show that firms that invest more in organization capital (i.e., changes in organization capital) are less (more) likely to move to the introduction, shake-out and decline (growth and maturity) stages in the subsequent five years. Our results are robust to alternative specifications of organization capital, life cycle proxies and endogeneity concerns.
Description
© 2017 Elsevier. This manuscript version is made available under the CC-BY-NC-ND 4.0 license: http://creativecommons.org/licenses/by-nc-nd/4.0/
This author accepted manuscript is made available following 24 month embargo from date of publication (Dec 2017) in accordance with the publisher’s archiving policy
Keywords
Organization capital, Firm life cycle
Citation
Hasan, M. M., & Cheung, A. (Wai-K. (2018). Organization capital and firm life cycle. Journal of Corporate Finance, 48, 556–578. https://doi.org/10.1016/ j.jcorpfin.2017.12.003