The Relationship between Capital Investment Choice and Capital Productivity: A Test of Firm Life Cycle Theory (A Comparative Investigation of Cyclical and Non-Cyclical Companies)
Journal Title: Advances in Mathematical Finance and Applications - Year 2018, Vol 3, Issue 4
Abstract
According to the firm life cycle theory, companies go through certain behavioral patterns in various stages of their life. A thorough understanding and recognition of these behavioral patterns, new investment in assets and the optimal use of assets can considerably enhance the capital productivity. In the current study, the relationship between the stages of firm life cycle and capital productivity and mediation relationship of the capital investment choice in the two groups of companies have been examined, and methodically compared and contrasted. To examine the research hypothesis, the data were gathered from 118 companies accepted in Tehran Stock Exchange during a period of 7 years. Findings of the research clearly indicated that there is a positive relationship between introduction, growth and maturity stages with capital productivity in the cyclical and non-cyclical companies. Regarding the cyclical companies, a positive relationship was witnessed between the decline stage and capital productivity. Such a relation, however, was not found between the two variables in non-cyclical companies. Also, no significant relationship was observed among the stages of introduction, growth, maturity and the capital investment choice in both groups of companies. In non-cyclical companies, the relationship between the decline stage and the capital investment choice was positive, while there was no relationship between cyclical companies. Capital investment choice also failed to prove the assumed mediating role.
Authors and Affiliations
Ali Khamaki, Parviz Saeidi, Arash Naderian
Keywords
Related Articles
- EP ID EP461063
- DOI 10.22034/AMFA.2018.577349.1124
- Views 59
- Downloads 0
Examining the Relationship between Social Responsibility and Disclosure of Remuneration Paid to Board of Directors
companies' continuity, because all companies have some relations with the society; Therefore, the society provides long-term survival of the company. In this way, companies in addition to economic responsibility, must ta...
Assessment of the efficiency of banks accepted in Tehran Stock Exchange using the data envelopment analysis technique
The research provides a systematic method for assessing the financial performance of the banks. The analysis is based on a set of benchmarks related to the financial performance of the banks. In this regard, this researc...
Management Demographic Characteristics, Auditor Choice and Earnings Quality: Empirical Evidence from Iran
Recent accounting and management literature shows that demographic character-istics of top management and corporate performance are related. Accordingly, using a two-stage least squares regression model (2SLS), this stud...
Analysis of Financial Leverage, Operating Leverage and Capital Venture Effect on Tobin's Q Ratio of Investment and Holding Companies Listed in Tehran Stock Exchange
The main purpose of this research is the study on effect of Financial and Operating Leverage and Venture Capital on Tobin's Q ratio amongst companies listed in Tehran Stock Exchange. In this research, the Holdings and In...
Impact of Managers’ Optimism on the Relationship between Patience of Major Shareholders and Information Influence Management
Behavioral financial knowledge deals with the behavior of investors and other users in the capital market. According to the financial knowledge, it is no longer expected that only factors such as accounting information a...