A New Methodology of Measuring Firm Life-Cycle Stages
International Journal of Economic Perspectives, Forthcoming
15 Pages Posted: 12 Oct 2006 Last revised: 18 Mar 2010
Date Written: September 1, 2009
Corporate life-cycle concept is widely used in a variety of disciplines, including management, economics and accounting, and also in the real-world investment. However, current commonly used methodologies of measuring life-cycle stages are either only suitable for small sample studies or only applicable in cross-sectional analysis of corporations over life-cycle stages. None of them can be employed in large-sample, time-series analysis. This paper develops a new methodology which makes the study of large-sample time-series properties within each stage a possibility, by comparing a corporation's status at each point of its development with its own historical overall status. We use real-world financial accounting data to illustrate and validate our methodology.
Keywords: Life cycle
JEL Classification: B41, C63, C81, M21, M31, G30
Suggested Citation: Suggested Citation