The Impact of Corporate Governance on Financial Constraints: Does the Life Cycle Stage of a Firm Matter?
Author
Abstract
This paper examines the relationship between corporate governance and financial constraints, and probes whether the firm’s life cycles influence the relationship between them. The empirical results indicate that the deviation between ultimate control and ownership, CEO duality, management ownership, blockholder ownership, institutional ownership, family ownership and family control are significantly related with financial constraints. Furthermore, the relationships between them are different across different life cycles. Therefore, firms can adjust the different aspects of corporate governance according to their life cycle, thereby reducing the financial constraints and promoting the firm's development.
Key Words
corporate governance, financial constraints, life cycle
