Life cycle theory and corporate capital structure — a review of empirical studies

Abstract

Decisions of the company’s managers in the context of shaping its capital structure differ depending on the stage of development of a particular company. Numerous studies have confirmed that the life cycle of a company determines the choice of financing channels by its managers and, consequently, influences the shape of the capital structure. The aim of this study is to identify future lines of research on the significance of life cycle theory in shaping the capital structure. Conclusions were drawn on the basis of a preliminary literature review of the company’s life cycle theory.