Characterization of the Business Life Cycle from a Financial Perspective: A Study of Ecuadorian Manufacturing Firms

Karla González; Gabriela Duque; Angie Eras Cedillo; Adrian Siguencia

doi:10.4067/s0718-27242025000200026

Autores/as

Karla González University of Azuay
Gabriela Duque University of Azuay ORCID 0000-0003-3783-1791
Angie Eras Cedillo University of Azuay ORCID 0000-0001-9528-6256
Adrian Siguencia University of Azuay ORCID 0000-0002-8802-8264

DOI:

https://doi.org/10.4067/s0718-27242025000200026

Resumen

Los estados financieros desempeñan un rol crítico en la toma de decisiones empresariales al proporcionar una visión completa de la estructura financiera de la compañía. Investigaciones previas han establecido una relación entre la etapa del ciclo de vida de una empresa y factores como la política de dividendos, la intensidad de capital, la gestión de inventarios y la edad de la misma. El objetivo de este estudio es determinar las características que aumentan la probabilidad de que una empresa se encuentre en una etapa de su ciclo de vida, analizando los estados financieros de 609 empresas manufactureras en Ecuador durante el período 2017 a 2019. Se realiza un análisis de clústeres para determinar si las empresas presentan características diferenciales según la etapa del ciclo de vida. Adicionalmente, se analizan los determinantes de estas etapas mediante un modelo de regresión logística. Finalmente, utilizando indicadores financieros, se examina la gestión financiera de cada grupo. Los resultados revelan que las empresas en etapas tempranas (introducción y crecimiento) enfrentan altos niveles de endeudamiento, mientras que aquellas que alcanzan la madurez priorizan el pago de dividendos. Por último, las empresas en fase de declive presentan desafíos importantes que comprometen su nivel de ingresos y su longevidad. Aunque la edad muestra una relación lineal con las diferentes etapas del ciclo de vida empresarial, no debe considerarse como la única variable explicativa.

Palabras clave:

Ciclo de vida
Clúster
Estados financieros
Ecuador
Desempeño financiero

Descargas

Los datos de descargas todavía no están disponibles.

Citas

Aharony, J., Falk, H., & Yehuda, N. (2006). Corporate life cycle and the value relevance of cash flow versus accrual financial information. https://www.researchgate.net/publication/228170690_Corporate_Life_Cycle_and_the_Value_Relevance_of_Cash_Flow_versus_Accrual_Financial_Information

Anthony, J., & Ramesh, K. (1992). Association between accounting performance measures and stock prices. Journal of Accounting and Economics, 15(2–3), 203–227. https://doi.org/10.1016/0165-4101(92)90018-W

Bachtiar, N. K., Ibrahim, M. W., & Korpysa, J. (2024). Has the innovation process in small business been completely explained? A study through social capital theory. Journal of Technology Management & Innovation, 19(4), 3–17. https://doi.org/10.4067/S0718-27242024000400003

Bakarich, K., Hossain, M., Hossain, M., & Weintrop, J. (2019). Different time, different tone: Company life cycle. Journal of Contemporary Accounting and Economics, 15(1), 69–86. https://doi.org/10.1016/j.jcae.2018.12.002

Balasubramanian, S., Radhakrishna, G., Sridevi, P., & Natarajan, T. (2019). Business health characterization of listed Indian companies using data mining techniques. International Journal of Business Information Systems, 32(3), 324–363. https://doi.org/10.1504/IJBIS.2019.103079

Bhattacharya, D., Chang, C., & Li, W. (2020). Stages of firm life cycle, transition, and dividend policy. Finance Research Letters, 33, Article 101217. https://doi.org/10.1016/j.frl.2019.101217

Biswas, P., Habib, A., & Ranasinghe, D. (2022). Firm life cycle and financial statement comparability. Advances in Accounting, 58, Article 100608. https://doi.org/10.1016/j.adiac.2022.100608

Buarque, B., Câmara, S., Paula Pinto, J. G., Pereira Lopes Júnior, E., & Batista de Melo Filho, J. I. (2024). The influence of dynamic capabilities in knowledge-intensive enterprises: A study on a regional program to foster innovation in KIE firms. Journal of Technology Management & Innovation, 19(4), 46–63. https://doi.org/10.4067/S0718-27242024000400046

Caro, N., & Guardiola, M. (2017). Identificación de empresas con dificultades financieras en mercados latinoamericanos a través del análisis de conglomerados. En Métodos estadísticos aplicados para diagnosticar y predecir el estado de crisis financiera en empresas que cotizan en mercados latinoamericanos (1.ª ed., pp. 27–38). Ediciones UNL. http://hdl.handle.net/11086/18705

Castro, P., Tascón, M., Amor-Tapia, B., & de Miguel, A. (2016). Target leverage and speed of adjustment along the life cycle of European listed firms. Business Research Quarterly, 19(3), 188–205. https://doi.org/10.1016/j.brq.2016.01.003

Chen, K., Su, X., Lin, L., & Shih, Y. (2021). Profitability of moving-average technical analysis over the firm life cycle: Evidence from Taiwan. Pacific-Basin Finance Journal, 69, Article 101633. https://doi.org/10.1016/j.pacfin.2021.101633

Chowdhury, H., & Shams, S. (2021). Does firm life cycle have impacts on managerial promotion tournament incentives? Australian Journal of Management, 46(4), 593–628. https://doi.org/10.1177/0312896220974417

Dickinson, V. (2011). Cash flow patterns as a proxy for firm life cycle. The Accounting Review, 86(6), 1969–1994. https://doi.org/10.2308/accr-10130

Dickinson, V., Kassa, H., & Schaberl, P. (2018). What information matters to investors at different stages of a firm’s life cycle? Advances in Accounting, 42, 22–33. https://doi.org/10.1016/j.adiac.2018.07.002

Drobetz, W., Halling, M., & Schröder, H. (2015). Corporate life-cycle dynamics of cash holdings. SSRN. https://doi.org/10.2139/ssrn.2578315

ElBannan, M. (2021). On the prediction of financial distress in emerging markets: What matters more? Empirical evidence from Arab Spring countries. Emerging Markets Review, 47, Article 100806. https://doi.org/10.1016/j.ememar.2021.100806

Elsayed, K. (2014). Inventory management over firm life cycle: Some empirical evidence. International Journal of Services and Operations Management, 19(4), 431–450. https://doi.org/10.1504/IJSOM.2014.065668

Elsayed, K., & Wahba, H. (2014). The effect of life cycle stage of a firm on the relationship between board size and financial performance. International Journal of Managerial and Financial Accounting, 6(4), 273–295. https://doi.org/10.1504/IJMFA.2014.066399

Elsayed, K., & Wahba, H. (2016). Reexamining the relationship between inventory management and firm performance: An organizational life cycle perspective. Future Business Journal, 2(1), 65–80. https://doi.org/10.1016/j.fbj.2016.05.001

Faff, R., Kwok, W., Podolski, E., & Wong, G. (2016). Do corporate policies follow a life-cycle? Journal of Banking and Finance, 69, 95–107. https://doi.org/10.1016/j.jbankfin.2016.04.009

Fenyves, V., Zsido, K., Bircea, I., & Tarnoczi, T. (2020). Financial performance of Hungarian and Romanian retail food small businesses. British Food Journal, 122(11), 3451–3471. https://doi.org/10.1108/BFJ-05-2019-0330

Fitri, R., Hosen, M., & Muhari, S. (2016). Analysis of factors that impact dividend payout ratio on listed companies at Jakarta Islamic Index. International Journal of Academic Research in Accounting, Finance and Management Sciences, 6(2), 87–97. https://doi.org/10.6007/IJARAFMS/v6-i2/2074

Fodor, A., Jorgensen, R., & Stowe, J. (2021). Financial clusters, industry groups, and stock return correlations. Journal of Financial Research, 44(1), 121–144. https://doi.org/10.1111/jfir.12236

Gort, M., & Klepper, S. (1982). Time paths in the diffusion of product innovations. The Economic Journal, 92(367), 630–653. https://doi.org/10.2307/2232554

Habib, A., & Hasan, M. (2019). Corporate life cycle research in accounting, finance and corporate governance: A survey, and directions for future research. International Review of Financial Analysis, 61, 188–201. https://doi.org/10.1016/j.irfa.2018.12.004

Haiyan, D., Ahmed, K., & Nanere, M. (2021). Life cycle, competitive strategy, continuous innovation and firm performance. International Journal of Innovation Management, 25(1), Article 2150004. https://doi.org/10.1142/s1363919621500043

Hanks, S., Watson, C., Jansen, E., & Chandler, G. (1994). Tightening the life-cycle construct: A taxonomic study of growth stage configurations in high-technology organizations. Entrepreneurship Theory and Practice, 18(2), 5–29. https://doi.org/10.1177/104225879401800201

Hasan, M., & Cheung, A. (2018). Organization capital and firm life cycle. Journal of Corporate Finance, 48, 556–578. https://doi.org/10.1016/j.jcorpfin.2017.12.003

Hasan, M., & Habib, A. (2017). Corporate life cycle, organizational financial resources and corporate social responsibility. Journal of Contemporary Accounting and Economics, 13(1), 20–36. https://doi.org/10.1016/j.jcae.2017.01.002

Jawahar, I., & McLaughlin, G. (2001). Toward a descriptive stakeholder theory: An organizational life cycle approach. The Academy of Management Review, 26(3), 397–414. https://doi.org/10.2307/259184

Jirásek, M., & Bílek, J. (2018). The organizational life cycle: Review and future agenda. Quality Innovation Prosperity, 22(3), 1–18. https://doi.org/10.12776/qip.v22i3.1177

Karacaer, S., & Gulec, O. (2017). Corporate life cycle methods in emerging markets: Evidence from Turkey. Journal of Economics, Finance and Accounting, 4(3), 224–236. https://doi.org/10.17261/Pressacademia.2017.690

Kazanjian, R. (1988). Relation of dominant problems to stages of growth in technology-based new ventures. Academy of Management Journal, 31(2), 257–279. https://doi.org/10.5465/256548

Kazem, M., & Hameedi, K. (2022). The impact of the company life cycle on the economic decisions of investors: A study in a sample of Iraqi banks listed in the Iraqi Stock Exchange. International Academic Journal of Accounting and Financial Management, 9(2), 79–88. https://doi.org/10.9756/IAJAFM/V9I2/IAJAFM0909

Lester, D., Parnell, J., & Carraher, S. (2003). Organizational life cycle: A five-stage empirical scale. The International Journal of Organizational Analysis, 11(4), 339–354. https://doi.org/10.1108/eb028979

Linares-Mustarós, S., Coenders, G., & Vives-Mestres, M. (2018). Financial performance and distress profiles: From classification according to financial ratios to compositional classification. Advances in Accounting, 40, 1–10. https://doi.org/10.1016/j.adiac.2017.10.003

Liu, C., & Chou, H. (2017). Corporate lifecycle and CEO compensation structure [Working paper]. https://www.efmaefm.org/0EFMAMEETINGS/EFMA%20ANNUAL%20MEETINGS/2017-Athens/papers/EFMA2017_0547_fullpaper.pdf

Maqsood, U. S., Li, Q., & Zahid, R. M. A. (2025). Adoption of digital transformation from a firm’s creation to decline: The role of China’s mass entrepreneur and innovation campaign. Financial Innovation, 11(1), Article 96. https://doi.org/10.1186/s40854-024-00740-1

Miller, D., & Friesen, P. (1984). A longitudinal study of the corporate life cycle. Management Science, 30(10), 1161–1183. https://doi.org/10.1287/mnsc.30.10.1161

Mintzberg, H. (1984). Power and organization life cycles. The Academy of Management Review, 9(2), 207–224. https://doi.org/10.2307/258435

Mokhova, N., & Zinecker, M. (2013). Liquidity, probability of bankruptcy and the corporate life cycle: The evidence from the Czech Republic. International Journal of Globalisation and Small Business, 5(3), 189–208. https://doi.org/10.1504/IJGSB.2013.054912

Mousavi, A., Mohammadzadeh, M., & Zare, H. (2022). A clustering approach to identify the organizational life cycle. Journal of Open Innovation: Technology, Market, and Complexity, 8(3), Article 108. https://doi.org/10.3390/joitmc8030108

Ramzan, M., & Lau, W. (2023). Firm life cycle, asset preferences, and financial performance: Does gender diversity matter? Social Science Quarterly, 104(5), 1101–1115. https://doi.org/10.1111/ssqu.13302

Rauf, F., Baolei, Q., Naveed, K., & Qadri, S. U. (2025). The moderating effect of firm life cycle on the influence of financial performance and green innovation performance on environmental, social, and governance reporting: Evidence from China. Business Ethics, the Environment & Responsibility. Advance online publication. https://doi.org/10.1111/beer.12840

Restrepo-Morales, J. A., Valencia-Cárdenas, M., & López Cadavid, D. A. (2024). Interplay of customer satisfaction, innovation, and product quality: Key determinants of company performance. Journal of Technology Management & Innovation, 19(2), 28–42. https://doi.org/10.4067/S0718-27242024000200028

Rexhepi Mahmutaj, L., & Jusufi, N. (2023). The importance of digital skills in firms’ innovation: The case of the Western Balkans. Journal of Technology Management & Innovation, 18(3), 90–102. https://doi.org/10.4067/S0718-27242023000300098

Sai, F., Zhu, G., Qin, Z., & Zheng, L. (2025). Linking technological relatedness to firm innovation: The moderating roles of environmental dynamism, competitiveness and enterprise life cycle. Baltic Journal of Management, 20(1), 52–71. https://doi.org/10.1108/bjm-08-2024-0435

Shahzad, F., Ahmad, M., Fareed, Z., & Wang, Z. (2022). Innovation decisions through firm life cycle: A new evidence from emerging markets. International Review of Economics & Finance, 78, 51–67. https://doi.org/10.1016/j.iref.2021.11.009

Shahzad, F., Lu, J., & Fareed, Z. (2019). Does firm life cycle impact corporate risk taking and performance? Journal of Multinational Financial Management, 51, 23–44. https://doi.org/10.1016/j.mulfin.2019.05.001

Sridharan, S., & Joshi, M. (2018). Impact of ownership patterns and firm life-cycle stages on firm performance: Evidence from India. Journal of Corporate Accounting and Finance, 29(1), 117–136. https://doi.org/10.1002/jcaf.22315

Stepanyan, G. (2012). Revisiting firm life cycle theory for new directions in finance. SSRN. https://doi.org/10.2139/ssrn.2126479

Tolstov, N. (2024). Determinants of sustainable innovation expansion strategy: The case study of companies from a declining industry. Journal of Corporate Finance Research, 18(1), 93–106. https://doi.org/10.17323/j.jcfr.2073-0438.18.1.2024.93-106

Valaskova, K., Kliestik, T., & Kovacova, M. (2018). Management of financial risks in Slovak enterprises using regression analysis. Oeconomia Copernicana, 9(1), 105–121. https://doi.org/10.24136/oc.2018.006

Yang, C., Hua, Y., & Hua, Z. (2022). R&D investment along the firm life-cycle: New evidence from high-tech industries. International Journal of Technology Management, 88(2–4), 353–388. https://doi.org/10.1504/IJTM.2022.121488

Yang, J., Li, H., Zhang, L., & Xu, G. (2025). Digital transformation’s impact on substantive innovation: A life-cycle perspective. Internet Research. Advance online publication. https://doi.org/10.1108/intr-08-2024-1204

Zhao, T., & Xiao, X. (2019). The impact of corporate social responsibility on financial constraints: Does the life cycle stage of a firm matter? International Review of Economics and Finance, 63, 76–93. https://doi.org/10.1016/j.iref.2018.08.010