The Value Relevance of Operational Innovation: Insights from the Perspective of Firm Life Cycle

Ryu, Sang-Lyul; Won, Jayoun

doi:10.3390/su14042058

Cited by 11 publications

(12 citation statements)

References 60 publications

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“…According to Ryu and Won's [14] theory, organizations undergo four distinct life-cycle stages, which are start-up, growth, maturity, and stagnation, just like products. Each stage is characterized by unique features.…”

Section: Firm Life Cycle Theorymentioning

confidence: 99%

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Company Age and Short-term Debt of Companies Listed on the Nairobi Securities Exchange, Kenya

Pyoko,

Muchiri

2024

AJESS

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Firms that are listed on the Nairobi Securities Exchange are looking for more cash to support their business operations and carry out particular development projects, thus they are gradually increasing the amount of debt finance that makes up their capital structure. This study aimed to investigate the effect of firm age on short term debt of firms listed on Nairobi Securities Exchange. This study was underpinned on form life cycle theory and pecking order theory. The study used secondary data which was obtained from the listed firms from 2007-2011. Panel data was used and the result showed a positive and significant relationship between firm age and short term debt of firm. From the results, the study recommends that management of companies should carefully consider the company’s age and the impact on debt maturity structure. They should also align short term debt strategies with company’s prospect and long term financial goals. Older firms with stable growth patterns may find short term debt suitable, while younger firms with higher growth expectations may benefit from other debt financing.

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Section: Firm Life Cycle Theorymentioning

confidence: 99%

“…Firms undergo modifications during their life cycle. Regarding performance, every stage has its own special characteristics [14]. Being physically fit from birth or in the early stages gives businesses a competitive edge.…”

Section: Introductionmentioning

confidence: 99%

Company Age and Short-term Debt of Companies Listed on the Nairobi Securities Exchange, Kenya

Pyoko,

Muchiri

2024

AJESS

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“…Third, from a life cycle perspective, growing firms need to make full use of fintech to obtain diversified financing channels through new fintech products and services, such as equity and accounts receivable financing [48,66]. Enterprises in the mature stage should face up to their technological shortcomings, promote the integration of financial technology innovation and enterprise technological innovation, and mobilize their innovative energy [68]. For enterprises in decline, we should strengthen the identification function of financial technology for declining enterprises, encourage financial institutions to provide targeted financial support for innovation, and encourage enterprises to actively explore new R&D fields to achieve sustainable development.…”

Section: Conclusion Implications and Limitations Sectionmentioning

confidence: 99%

Corporate Nature, Financial Technology, and Corporate Innovation in China

Gao

Jin

2022

Sustainability

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Corporate innovation has become the main driving force for the long-term development of enterprises, but the characteristics of high risk, long cycle, and high capital demand of corporate innovation activities expose enterprises to high financial rejection. Financial technology, formed by combining digital technology with traditional financial services, is gradually changing the financial service model and providing new ideas for corporate investment and financing. In this study, using the data of non-financial and non-real estate listed companies in Shanghai and Shenzhen markets, A-shares from 2015 to 2020, we examine the effect of financial technology on corporate innovation through a fixed-effects model and investigate the influence of corporate characteristics on the relationship between financial technology and innovation through a moderating-effects model. The results show that financial technology enhances the ability to serve real enterprises by reshaping financial services, which in turn effectively drives an increase in corporate innovation, and the mechanism is conditionally heterogeneous. In addition, the moderating effect of the firm’s nature is found to be more significant in non-state-owned firms, high-technology firms, and firms in the growth and maturity stages by life cycle. The policy implications of this study are to continuously promote theoretical research, to guide the development of fintech, and to improve the construction of financial technology infrastructure. Additionally, to deepen the integration of financial technology with real enterprises and establish differentiated financial technology support tools, so as to improve the precision of promoting enterprise innovation.

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“…Akbar et al [20] examined the influence of financial distress on corporate restructuring decisions and whether this restructuring varies across the firm life cycle (FLC) stages of Pakistani nonfinancial listed firms for the 12 years from 2005 to 2016 inclusive. Ryu and Won [21] investigated the effect of innovation on firm value at each stage of the firm life cycle (FLC): growth, mature, and decline stages. Innovation involves improving the yield of input resources and creating new revenue sources.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Harymawan et al [18] (i) Investment efficiency (ii) Environmental (iii) Social (iv) Governance Nazir et al [19] (i) Governance (ii) Global technology Akbar et al [20] (i) Financial distress (ii) Corporate restructuring Ryu and won [21] (i) Innovation (ii) Value frim Khoung et al [22] (i) Life cycle (ii) Earning management Yulianto [23] (i) Frim size proxy (ii) Total sales Ahmad et al [24] (i) Life cycle (ii) Investment efficiency Akbar et al [25] (i) Capital management (ii) Profitability (iii) Market performance Yulianto et al [26] (i) Life cycle (ii) Technology information digitalization (TID) Shahzad et al [27] (i) Risk (ii) Emergence (iii) Growth (iv) Decline Ahsan et al [8] (i) Risk (ii) Maturity (iii) Stagnation Complexity nonsystematic risk is higher in the introduction and decline stages and lower in the growth and maturity stages. Also, cash flow fluctuations and information uncertainty differ only in the maturity stage from the stagnation stage, and in this regard, there is no difference between other stages of the life cycle and the stagnation stage.…”

Section: Author Variablesmentioning

confidence: 99%

The Effect of Specific Risk in Various Stages of the Life Cycle of Companies Listed on the Tehran Stock Exchange

et al. 2022

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This research aims to examine the specific risk of companies and their effectiveness in various stages of the company life cycle on state and nonstate ownership. For this purpose, the specific risk was estimated using Fama and French three-factor models, and the research objective was examined by considering the data panel model during the period 2015 to 2020 in a statistical sample consisting of 136 companies active in the Tehran Stock Exchange. For this purpose, the main contribution of research is evaluation of the effect of specific risk in different stages of the life cycle of companies admitted to the Tehran Stock Exchange. Therefore, the main valuable advantage to helping stock managers is assessing the impact of government ownership and nongovernment ownership on the specific risk of companies at different stages of the life cycle. Also, presenting a model to show the effects of dependent and independent variables in order to evaluate the impact of government and nongovernment ownership. The research results confirmed that the specific risk of the company in the stages of introduction, growth, and decline is higher compared to the stages of maturity and stagnation of the life cycle of companies listed on the Tehran Stock Exchange. Because the coefficients of virtual variables related to the life cycle stages of the company are estimated to be significant. Also, the finding confirmed that government ownership significantly affects the relationship between firm risk and life cycle stages in companies listed on the Tehran Stock Exchange. Because, the coefficient of variable state ownership is negative and significant, indicating a lower specific risk in state-owned companies than in nonstate-owned companies.

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The Value Relevance of Operational Innovation: Insights from the Perspective of Firm Life Cycle

Cited by 11 publications

References 60 publications

Company Age and Short-term Debt of Companies Listed on the Nairobi Securities Exchange, Kenya

Company Age and Short-term Debt of Companies Listed on the Nairobi Securities Exchange, Kenya

Corporate Nature, Financial Technology, and Corporate Innovation in China

The Effect of Specific Risk in Various Stages of the Life Cycle of Companies Listed on the Tehran Stock Exchange

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