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Business life cycle and capital structure: evidence from Chinese manufacturing firms

Research output: Contribution to journalArticlepeer-review

  • Lin Tian
  • Liang Han
  • Song Zhang
This paper uses a panel data-fixed effect approach and data collected from Chinese public manufacturing firms between 1999 and 2011 to investigate the impacts of business life cycle stages on capital structure. We find that cash flow patterns capture more information on business life cycle stages than firm age and have a stronger impact on capital structure decision-making. We also find that the adjustment speed of capital structure varies significantly across life cycle stages and that non-sequential transitions over life cycle stages play an important role in the determination of capital structure. Our study indicates that it is important for policy-makers to ensure that products and financial markets are well-balanced.
Original languageEnglish
Pages (from-to)22-39
JournalChina & World Economy
Issue number2
Publication statusPublished - 1 Mar 2015


  • ZHANG_2014_cright_CWE_Business Life Cycle and Capital Structure

    Rights statement: This is the accepted version of the following article: Business Life Cycle and Capital Structure: Evidence from Chinese Manufacturing Firms, (2015), China and World Economy, 23(2), pp. 22-39, ISSN: 1671-2234, DOI: 10.1111/cwe.12105, which has been published in final form at

    Accepted author manuscript (Post-print), 259 KB, PDF document

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