Advances in Management and Applied Economics

The Relationship between Enterprise Financing and Enterprise Life Cycle

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  • Abstract

     

    In today's market economy era, the financing activities of enterprises are facing many new challenges. In order to ensure the effective financing management of enterprises, it is necessary to change the traditional management mode so that enterprises can better cope with various unknown risks and promote the development of enterprises. According to the theory of enterprise life cycle, enterprises have a process from growth to death, from prosperity to decline. The theory personifies the enterprise and regards the enterprise organization as the life body. The theory uses the concept of organism life cycle to analyze the emergence, growth, development and decline of enterprise organization. Therefore, enterprises in different life stages show corresponding characteristics in financing activities. Based on the financing data of more than 14000 enterprises established in the United States from the 20th century to the 21st century, this paper uses regression analysis and fixed effect model to analyze the relationship between enterprise financing and enterprise life cycle.

     

    JEL classification numbers: C51, G32, G34, M21, O32, O43

    Keywords: Financing, Enterprise Life Cycle, American Enterprise, Fixed Effect Model.