Firm Maturity and the Pecking Order Theory

• DOI: 10.2139/ssrn.1760505
• Publication Date: 2012-01-05T15:29:45Z
• Authors: Laarni T. Bulan; Zhipeng Yan
• Keywords: Pecking order theory

We identify firms according to two life cycle stages, namely growth and maturity, test the pecking order theory of financing. find a strong maturity effect, i.e. describes financing behavior mature better than firms. Our findings show that firm is an alternative proxy for debt capacity. In particular, are older, more stable highly profitable with good credit histories. Thus, they naturally have greater After controlling fairly well.