ARTICLE

A DYNAMIC RESOURCED BASED VIEW ON FIRMS LIFE CYCLE STAGES AND CAPITAL STRUCTURE THEORIES

  1. HOME
  2. ARTICLE

06 Pages : 61-69

http://dx.doi.org/10.31703/gssr.2020(V-II).06      10.31703/gssr.2020(V-II).06      Published : Jun 2

A Dynamic Resourced Based View on Firm's Life Cycle Stages and Capital Structure Theories: A Comparative Analysis of Developed and Emerging Asian Markets

Abstract

    ‘Dynamic resource-based view’ is the major inspiration for this study, which signifies the changes in paths & patterns of the evolution in organizational capabilities during its LCS. Using the Dickinson’s (2011) firm’s LCS, the study determined diverse behavior of traditionally established explanatory variables across stages. For the purpose of analysis GMM model has been used, the study conducted a comparative analysis of developed and emerging markets in Asia. The results showed higher COE capital during introduction and decline stages in emerging markets implying trade-off theory and dynamic resource-based view. Study denies association between COE capital and market-to-book value in developed markets in line with market timing theory Its concluded that COE’s explanatory factors evolve across markets and firm’s LCS the explanatory power of the general model is much higher when the study included LCS in its main model justifying resource-based view.

    Firm Life Cycle Stages (FLCS), Cost of Equity Capital (COE), Market-to-Book Value, Asian Markets

    (1) Misbah Wadood
    PhD Scholar, Department of Management Sciences, COMSATS University, Islamabad, Pakistan
    (2) Hashim Khan
    Assistant Professor, Department of Management Science, COMSATS University, Islamabad, Pakistan.
    (3) Hassan Wadood
    Lecturer, Umm Al Qura University, Makkah KSA.
Fulltext PDF

References

  • Akingunola, R. O., Olawale, L. S., & Olaniyan, J. D. (2018). Capital Structure Decision and Firm Performance: Evidence from Non-Financial Firms in Nigeria. Acta Universitatis Danubius. Å’conomica, 13(6).
  • Akpan, S. S., Mahat, F., Nordin, B.-A. A., & Nassir, A. M. (2017). Another look at risk-based capital regime, capital structure, insurer's risk profile and performance: A conceptual paper. Paper presented at the Global Conference on Business and Economics Research (GCBER), Universiti Putra Malaysia, Serdang, Malaysia, August.
  • Bulan, L. T., & Yan, Z. (2010). Firm maturity and the pecking order theory. Available at SSRN 1760505.
  • Câmara, A., Chung, S. L., & Wang, Y. H. (2009). Option implied COE and its properties. Journal of Futures Markets: Futures, Options, and Other Derivative Products, 29(7), 599-629.
  • DeAngelo, H., & DeAngelo, L. (2000). Controlling stockholders and the disciplinary role of corporate payout policy: A study of the Times Mirror Company. Journal of financial economics, 56(2), 153-207.
  • Dickinson, V. (2011). Cash flow patterns as a proxy for firm life cycle. The Accounting Review, 86(6), 1969-1994.
  • Faccio, M., & Xu, J. (2015). Taxes and capital structure. Journal of financial and quantitative analysis, 50(3), 277-300.
  • Fama, E. F., & French, K. R. (1989). Business conditions and expected returns on stocks and bonds. Journal of financial economics, 25(1), 23-49.
  • Fluck, Z., & Lynch, A. W. (1999). Why do firms merge and then divest? A theory of financial synergy. The journal of business, 72(3), 319-346.
  • Frank, M. Z., & Goyal, V. K. (2004). The effect of market conditions on capital structure adjustment. Finance Research Letters, 1(1), 47-55.
  • Frielinghaus, A., Mostert, B., & Firer, C. (2005). Capital structure and the firm's life stage. South African Journal of Business Management, 36(4), 9-18.
  • Gebhardt, W. R., Lee, C., & Swaminathan, B. (1999). Toward an ex ante cost-of-capital. Available at SSRN 145928.
  • Graham, J. R., & Harvey, C. R. (2001). The theory and practice of corporate finance: evidence from the field. Journal of financial economics, 60(2-3), 187-243.
  • Hussain, M. F., Afzal, A., Asif, M., Ahmad, N., & Bilal, R. M. (2011). Impact of innovation, technology and economic growth on entrepreneurship. American International Journal of Contemporary Research, 1(1), 45-51.
  • Lemmon, M., & Zender, J. (2002). Debt capacity and tests of capital structure theories (Working paper University of Utah).
  • Lupi, A., Myint, S., & Tsomocos, D. P. (2017). How investment opportunities impact optimal capital structure
  • Xu, G., Vocke, D., Faccio, D., Garnier, J., Roger, T., Trillo, S., & Picozzi, A. (2015). From coherent shocklets to giant collective incoherent shock waves in nonlocal turbulent flows. Nature communications, 6, 8131.
  • Yousaf, S., & Iftikhar, K. (2018). Firm-Specific Determinants of Capital Structure: Implication of Pecking Order Theory in Automotive Industry of Pakistan. Abasyn University Journal of Social Sciences.

Cite this article

APA

    APA : Wadood, M., Khan, H., & Wadood, H. (2020). A Dynamic Resourced Based View on Firm's Life Cycle Stages and Capital Structure Theories: A Comparative Analysis of Developed and Emerging Asian Markets. Global Social Sciences Review, V(II), 61-69. https://doi.org/10.31703/gssr.2020(V-II).06

CHICAGO

    CHICAGO : Wadood, Misbah, Hashim Khan, and Hassan Wadood. 2020. "A Dynamic Resourced Based View on Firm's Life Cycle Stages and Capital Structure Theories: A Comparative Analysis of Developed and Emerging Asian Markets." Global Social Sciences Review, V (II): 61-69 doi: 10.31703/gssr.2020(V-II).06

HARVARD

    HARVARD : WADOOD, M., KHAN, H. & WADOOD, H. 2020. A Dynamic Resourced Based View on Firm's Life Cycle Stages and Capital Structure Theories: A Comparative Analysis of Developed and Emerging Asian Markets. Global Social Sciences Review, V, 61-69.

MHRA

    MHRA : Wadood, Misbah, Hashim Khan, and Hassan Wadood. 2020. "A Dynamic Resourced Based View on Firm's Life Cycle Stages and Capital Structure Theories: A Comparative Analysis of Developed and Emerging Asian Markets." Global Social Sciences Review, V: 61-69

MLA

    MLA : Wadood, Misbah, Hashim Khan, and Hassan Wadood. "A Dynamic Resourced Based View on Firm's Life Cycle Stages and Capital Structure Theories: A Comparative Analysis of Developed and Emerging Asian Markets." Global Social Sciences Review, V.II (2020): 61-69 Print.

OXFORD

    OXFORD : Wadood, Misbah, Khan, Hashim, and Wadood, Hassan (2020), "A Dynamic Resourced Based View on Firm's Life Cycle Stages and Capital Structure Theories: A Comparative Analysis of Developed and Emerging Asian Markets", Global Social Sciences Review, V (II), 61-69

TURABIAN

    TURABIAN : Wadood, Misbah, Hashim Khan, and Hassan Wadood. "A Dynamic Resourced Based View on Firm's Life Cycle Stages and Capital Structure Theories: A Comparative Analysis of Developed and Emerging Asian Markets." Global Social Sciences Review V, no. II (2020): 61-69. https://doi.org/10.31703/gssr.2020(V-II).06