Do corporate policies follow a life-cycle?

Robert Faff, Wing Chun Kwok, Edward J. Podolski, Lap Bun Wong

Research output: Journal article publicationJournal articleAcademic researchpeer-review

116 Citations (Scopus)


We examine whether corporate investment, financing, and cash policies are interdependent and follow a predictable pattern in line with the firm life-cycle. We find that investments and equity issuance decrease with firm life-cycle, while debt issuance and cash holdings increase in the introduction and growth stages and decrease in the mature and shake-out/decline stages of the firm's life-cycle. These results are robust after using various proxies for life-cycle and controlling for firm, CEO and board level characteristics. Collectively, our results show that corporate policies follow a firm life-cycle.
Original languageEnglish
Pages (from-to)95-107
Number of pages13
JournalJournal of Banking and Finance
Publication statusPublished - 1 Aug 2016


  • Cash policy
  • Financing decisions
  • Investment decisions
  • Life-cycle theory

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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