The Product Life Cycle: A Paradigm for Understanding Financial Management
Financial Practice and Education, Fall/Winter 1996
9 Pages Posted: 22 Jun 2015
Date Written: October 21, 1996
The product life cycle has been overlooked by academicians who examine the financial aspects of corporate behavior and teach finance. This article demonstrates how the life cycle concept can be used to enhance both research and teaching by demonstrating how key financial variables, such as market returns, beta, book-to-market value, dividend payout ratios and others. can be expected to change over the course of a firm 's life cycle. These variables capture the essence of corporate growth. The statistical results from a sample of 981 firms suggest that the life cycle provides unique insights for evaluating corporate growth and performance, and corporate risk and return.
Keywords: product life cycle, corporate growth and performance, corporate risk and return
JEL Classification: G
Suggested Citation: Suggested Citation