When does corporate governance matter? Evidence from across the corporate life-cycle

O’Connor, Thomas; Byrne, Julie

doi:10.1108/mf-11-2013-0306

Cited by 17 publications

(17 citation statements)

References 73 publications

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“…They argued that firms with higher RE/TA ratio tend to be mature with declining investments, while lower RE/TA ratio implies that firms are young and growing. To classify the firms into introduction, growth, maturity, and decline stages, we follow O'Connor and Byrne [70] and take the median of RE/TA ratio, where firms above the sample median are considered as mature firms. Further, firms at their early stage of life-cycle are deficient in retained earnings [71] and are inclined to raise all or most of the investment funds from external sources.…”

Section: Why Cash Flow Based Measure Of Firm Life-cycle?mentioning

confidence: 99%

Is Bankruptcy Risk Tied to Corporate Life-Cycle? Evidence from Pakistan

Akbar

Tang

et al. 2019

Sustainability

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In this paper we analyze the relationship between bankruptcy risk and the corporate life cycle in Pakistan from 2005 to 2014. For this purpose, we run a Hierarchical Linear Mixed Model (HLM) for a sample of 301 non-financial listed firms in 12 different sectors. The empirical outcomes reveal that firms during introduction, growth and, decline stages (mature stage) of life-cycle experience higher (lower) bankruptcy risk. Moreover, in juxtaposition with growth stage, bankruptcy risk is higher at the introduction stage of life-cycle. These findings suggest that financial managers should be cautious about the financial fragility of the firm at each stage of corporate life-cycle. The results also entail that Pakistani firms do not follow a sequential pattern in their life-cycle, rather they have the tendency to revert to a previous stage or jump to the next stage of life-cycle. This is the first study that empirically examines the association between firm life-cycle stage and corresponding bankruptcy risk and asserts that managers must incorporate the life-cycle effects into their financial planning and decision making for the sustainable working of an enterprise.

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Section: Why Cash Flow Based Measure Of Firm Life-cycle?mentioning

confidence: 99%

Is Bankruptcy Risk Tied to Corporate Life-Cycle? Evidence from Pakistan

Akbar

Tang

et al. 2019

Sustainability

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“…There are, however, studies that look both quantitatively and qualitatively on how CG practices can evolve around the corporate life cycle. These studies include, for instance, Certo (2003), Lynall et al (2003), Filatotchev et al (2006), Huse and Zattoni (2008), Ramaswamy et al (2008), Harjoto and Jo (2009), Filatotchev and Allcock (2010), Ju-Liang et al (2011) and O'Connor and Byrne (2015b. Although these articles provide important insights about how CG practices can evolve around the different OLC stages, they do not provide a complete framework for the development of CG practices from a firm life cycle perspective and/or they fail to provide empirically tested results for such frameworks.…”

Section: Corporate Governance Practices and Organizational Life Cyclementioning

confidence: 99%

Corporate governance practices and firm performance: a configurational analysis across corporate life cycles

Amin

Mohamed

Hussain

2021

IJAIM

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Purpose This study aims to explore corporate governance (CG) practices that can lead to firms’ better performance in different organizational life cycles. The authors propose a configurational approach to explore how a set of CG practices combine in bundles to achieve high performance outcomes for firms across their corporate life cycles. Design/methodology/approach Fuzzy-set qualitative comparative analysis was used to analyze a sample of data of 21 countries and 9 industries. Data referred to the period of 9 years extending from the year 2005 to the year 2013. Findings This study reveals that there are multiple CG practices that exist through firms that can achieve high firm performance. Moreover, CG practices combine in different ways for firms in their growth, maturity and declining stages. Research limitations/implications This study demonstrates the value of using a configurational analytical approach to explore both the firm and country-specific CG practices (together) that engage firms to achieve the desired level of performance across the corporate life cycles. Practical implications The current study draws attention to the policymakers’ need to assess the current level of regulatory and competitive development of their countries and form policy accordingly. The approach used in the current research study not only offers the linkages between CG and performance to managers as incentives to comply with regulation but also to view CG-related activity as a strategic move. Social implications The approach used in the current research study not only offers the linkages between CG and performance to managers as incentives to comply with regulation but also to view CG-related activity as a strategic move. Originality/value This study broadening the focus of CG studies to include a rigorous explanation of the global CG phenomena and to provide effective solutions for the practitioners. Contribution to Impact This study demonstrates the value of using a configurational analytical approach to explore both the firm and country-specific CG practices (together) that engage firms to achieve the desired level of performance across the corporate life cycles.

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“…Thus, to the extent that financial regulation reduces the risk of intentional misstatements that originate from agency conflicts that do not typify young life‐cycle firms, these firms are less likely to reap the intended FRQ benefits of financial regulation (O'Connor and Byrne [2015a, 2015b], Filatotchev, Toms, and Wright [2006]). In addition, to the extent that young life‐cycle firms utilize greater debt in their capital structure, then lenders might further constrain managerial opportunism reducing the potential benefits of financial regulation.…”

Section: Literature Review and Predictionsmentioning

confidence: 99%

The Innovation and Reporting Consequences of Financial Regulation for Young Life‐Cycle Firms

Allen

Lewis-Western

Valentine

2021

J of Accounting Research

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Firm life-cycle stage reflects a firm's current strategic direction toward exploration independent of age or size. We provide evidence that young life-cycle firms are particularly vulnerable to negative innovation consequences from financial regulation but do not appear to experience any compensating financial reporting quality (FRQ) benefits. Using a generalized difference-indifferences design around Sarbanes Oxley Act of 2002 (SOX), we document a significant reduction in both research and development (R&D) spending and innovation outputs for young life-cycle stage firms after regulation. Declines in innovation manifest both from the diversion of scarce resources and from the imposition of an organizational culture mismatched to the pursuit of explorative innovation, resulting in a less generalizable and less diversified patent portfolio. However, we find no evidence that improvements to FRQ

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When does corporate governance matter? Evidence from across the corporate life-cycle

Cited by 17 publications

References 73 publications

Is Bankruptcy Risk Tied to Corporate Life-Cycle? Evidence from Pakistan

Is Bankruptcy Risk Tied to Corporate Life-Cycle? Evidence from Pakistan

Corporate governance practices and firm performance: a configurational analysis across corporate life cycles

The Innovation and Reporting Consequences of Financial Regulation for Young Life‐Cycle Firms

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