| The concept of life-cycle originated from bionics and currently more and morescholars start to consider its application in financial management. Though manyforeign scholars have made progress in this field, but few researches have been madein our country.The debt financing decision is one of the prominent financial decisions in acompany.The ratio of debt, the debt maturity period and the structure of its sourceactually represents a specific governance structure, and it will play an important rolein company performance. This paper which is based on the perspective of firmlife-cycle,focuses on the data from2008to2011of listed manufacturingcompanies,uses the reference from widely-used classification of growing rate inIndustial Economic to divide the whole samples into three subsamples(the growingstage,the mature stage and the declining stage) and analyses the effect of total debtamount, debt duration and debt source to company performance among various stagedof life cycle by using the multiple regression.The result implies that:(1) Long-termdebt and short-term debt are negatively correlated to company performance in thewhole life cycle and the extent of their correlation varies in different stages. In thegrowing stage, the negative correlation between short-term debt and companyperformance is stronger than the long-term debt, while the result is just on thecontrary in maturing stage, and the nagetive correlation of short-term debt andlong-term debt to company performance is almost equal;(2) Debt has a negativeeffect to company performance in different stages of firm life cycle except that thebusiness credit has a positive effect to company performance in maturing stage. Thisshows that in the different stages of the life cycle,debt has different effect to companyperformance,and the result proved the study on effect of debt financing to corporateperformance during firm life-cycle has a theoretical and practical significance.This paper put forward suggestions for firms based on the company’scharacteristicsin in different stages of life cycle and empirical results.The enterprisesshould maintain a reasonable level of debt and adjust the internal structu re of the debt,strengthen the manager incentive, meanwhile, enterprises should maintain acooperative relations with banks, and strive to broaden the financing channels. |
