How to Evaluate Risk Behavior Under Different Life Cycles of Companies

The purpose of this study is to investigate the behavior of systematic, unsystematic and total risk in different life cycles of companies and seeks to answer the question whether the risk behavior of companies at different stages of the life cycle is different?

To answer the above question, 153 companies in the Tehran capital market were selected by screening as a statistical sample. The data collected over an 8-year period between 2011 and 2018 is considered.

The results of regression analysis show that unsystematic risk fluctuations in the introduction phase are more than the growth phase and also companies that face more cash flow fluctuations, in the introduction phase are faced with more unsystematic fluctuations than the growth phase. Finally, the results showed that companies in the introduction and decline stages do not face more total risk and market than the growth and maturity stage.

Originality/Value: 

This article evaluates the risk behavior under different life cycles of companies with a corporate risk management approach.