Firm Life Cycle and the Cost of Equity Capital: Does Corporate Social Responsibility Matter?

Document Type : Research Paper

Author

Department of Accounting, A K.C, Islamic Azad University, Aliabad Katoul, Iran

10.22059/ijms.2025.394597.677609

Abstract

The purpose of this study is to investigate the relationship between the firm life cycle and the cost of equity capital (CEC). For this purpose, we separate the sample firms based on five stages of corporate life cycles, including introduction, growth, maturity, shake-out, and decline. Using data from 136 firms listed on the Tehran Stock Exchange for the period 2019-2023 and panel data regressions, the results show that the stages of the firm life cycle affect the CEC. More specifically, we find that the CEC is lower in the growth and maturity stages than in the shake-out stage. In addition, our findings show that the CEC in the decline stage is higher than in the shake-out stage and corporate social responsibility (CSR) moderates the relationship between the firm life cycle and CEC. Our study contributes to the literature by examining the relationship between firm life cycles and corporate environmental commitment, showing how it changes across life cycle stages. The research is particularly valuable for its focus on Iran and its exploration of CSR as a moderating factor.

Keywords

Main Subjects

References

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Interdisciplinary Journal of Management Studies
Volume 19, Issue 2
April 2026
Pages 425-442

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