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A study of life cycle of the investment activities of enterprises: Evidence from the best practices of Russia

Vol. 25, Iss. 3, MARCH 2019

Received: 26 November 2018

Received in revised form: 14 February 2019

Accepted: 28 February 2019

Available online: 29 March 2019

Subject Heading: INVESTING

JEL Classification: G31

Pages: 677–690

https://doi.org/10.24891/fc.25.3.677

Ivanov V.V. Saint-Petersburg State University (SPbSU), St. Petersburg, Russian Federation
viktor.ivanov@spbu.ru

https://orcid.org/0000-0003-4121-0605

L'vova N.A. Saint-Petersburg State University (SPbSU), St. Petersburg, Russian Federation
n.lvova@spbu.ru

https://orcid.org/0000-0002-9467-2785

Pokrovskaya N.V. Saint-Petersburg State University (SPbSU), St. Petersburg, Russian Federation
n.pokrovskaia@spbu.ru

https://orcid.org/0000-0002-8314-9470

Andrianov A.Yu. Saint-Petersburg State University (SPbSU), St. Petersburg, Russian Federation
alex@andrian.spb.ru

https://orcid.org/0000-0003-4694-2688

Subject This article considers the issues of investment activity of enterprises taking into account the stage of life cycle.
Objectives The article intends to substantiate a hypothesis about the life cycle of the investment activity of industrial enterprises, decomposed into four components. It helps identify significant factors influencing the investment activity in different corporate age.
Methods To test the hypothesis, we applied a model of corporate age scoring, adapted to meet the objectives and characteristics of the sample. The data from the Professional Market and Company Analysis System SPARK over 2011 to 2015 are the source of information about the sample.
Results The article gives the characteristic of the enterprise investment activity in the context of the organization's life cycle concept. It also presents a formulation and decomposition of the hypothesis about the life cycle of the company's investment activity.
Conclusions The article shows that at the stage of active growth the analyzed enterprises seek to actively form fixed assets, borrowed funds being the predominant source. Having reached maturity, they demonstrate restrained investment activities, focusing on the adopted strategy, which becomes indifferent to the influence of various factors. Aging enterprises lose flexibility in choosing effective investment objects and reducing the level of reinvestment of profits, they are moving to the path of recession.

Keywords: organization, life cycle, corporate life cycle, investment activity, investments

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