The pecking order theory testing on company life cycle

  • Ida Ayu Kayika Apsari Udayana University, Denpasar, Indonesia
  • Ni Ketut Rasmini Udayana University, Denpasar, Indonesia
Keywords: company, growth, life cycle, mature, pecking order theory

Abstract

This study was conducted on 49 property and real estate companies listed on the Indonesia Stock Exchange. Year of observation in this research is the year 2013-2017. Research samples of 49 property and real estate companies are grouped based on their life cycle criteria based on the company's net sales for 5 years. After the company is grouped based on its life cycle, multiple linear regression tests are used to test whether the company's Life Cycle affects the company in applying Pecking Order Theory in its funding decision. After multiple linear regression tests, the company in the Growth and Mature cycle stages is compared to whether firm growth is stronger than mature in applying Pecking Order Theory. The results of this study obtained Life Cycle property and real estate companies listed on the Stock Exchange did not significantly affect the Pecking Order Theory. The life cycle of the company does not affect the company in determining its funding decision. The life cycle of the company does not affect the company to apply the Pecking Order Theory in determining its capital structure. Companies that have been grouped according to their life cycle, in determining their capital structure, whether the company will fund with internal funds or external funds company, not based on the life cycle of the company.

Downloads

Download data is not yet available.

References

Arifin, Z. (2009). Evaluasi pembelajaran (Vol. 152). Bandung: PT Remaja Rosdakarya.

Awat, N. I, dan Muljadi. 1995. Keputusan Keputusan Keuangan Perusahaan: Teori dan Hasil Pengujian Empiris, Yogayakarta: Liberty.

Brigham, E. F. (1997). dan Weston J.

Bulan, L. T., & Subramanian, N. (2009). The firm life cycle theory of dividends. Dividends and dividend policy, 201-213.

Damodaran, A. (1997). Corporate Finance. Theory and Practice, John Wiley&Sons. Inc. Newyork.

Dewi, I. G. A. A. O., & Dewi, I. G. A. A. P. (2017). Corporate social responsibility, green banking, and going concern on banking company in Indonesia stock exchange. International Journal of Social Sciences and Humanities, 1(3), 118-134. https://doi.org/10.29332/ijssh.v1n3.65

Monica, J., & Pramesti, M. (2017). Pengujian Pecking Order Theory terhadap Perusahaan Surplus Non Keuangan di Bursa Efek Indonesia. Journal of Technology Management, 16(2), 185-196.

Nehru, R. (2016). Corporate social responsibility & education for sustainable development. International Research Journal of Engineering, IT & Scientific Research, 2(3), 72-81.

Ogunsiji, A., & Ladanu, W. (2017). A theoretical study of performance measures in the strategic and corporate entrepreneurships of firms. International Journal of Physical Sciences and Engineering, 1(1), 72-80. https://doi.org/10.21744/ijpse.v1i1.15

Palma, C. A. M., Pérez, A. V., Gamez, M. R., & Torres, L. T. M. (2018). A house a small company. International Journal of Physical Sciences and Engineering, 2(1), 26-34. https://doi.org/10.29332/ijpse.v2n1.85

Primudyastono, B. Y. (2012). Pengujian teori pecking order pada life-cycle perusahaan di Indonesia (Doctoral dissertation, Universitas Gadjah Mada).

Putri, Y. K. W., & Sujana, I. K. (2018). The influence of bid-ask spread and leverage on earnings management with good corporate governance as moderating variable. International Research Journal of Management, IT and Social Sciences, 5(3), 8-21.

Sukardi, A. (2009). Participatory governance dalam pengelolaan keuangan daerah. LaksBang.

Tripathy, M. (2018). Building quality teamwork to achieve excellence in business organizations. International Research Journal of Management, IT and Social Sciences, 5(3), 1-7.

Wokukwu, K. C. (2000). Life cycle and capital structure: some empirical evidence. Nova Southeastern University.

Published
2019-08-23
How to Cite
Apsari, I. A. K., & Rasmini, N. K. (2019). The pecking order theory testing on company life cycle. International Research Journal of Management, IT and Social Sciences, 6(5), 101-107. https://doi.org/10.21744/irjmis.v6n5.704
Section
Articles