Firm’s Life Cycle and Trade Credit

The purpose of this research is to investigate the impact of life cycle stages on companies' use of trade credit. Statistical analysis has applied using the information of 171 companies admitted to the Tehran Stock Exchange during the years 1388 to 1400. To test the hypotheses of the research, multiple regression models of panel data with the generalized least squares estimation method and the method of controlling the effects of year and industry were used. In order to measure the life cycle, Dickinson (2011) approach used as the main criterion and D'Angelo et al.'s (2005) approach as a supplementary criterion. The results of the tests showed that the companies in the stages of start, growth and decline use more trade credit than in the shake out stage, while trade credit in the maturity stage is not significantly different from the shake out stage. The results of supplementary tests also confirm the initial results. The results of the present research add to the richness of the theoretical literature of trade credit and the theory of financing in the stages of the life cycle; especially since a developing market has been the subject of research.