Studying the Relationship between Corporate life Cycle and Stock Liquidity of Companies

A major source of financing in the capital markets by companies and governments all over the world is to recognize a suitable place to invest. One thing that is attractive for investors in the stock exchange is awareness of the factors which affects the liquidity of the shares، and the main objective of this study is to investigate the relationship between the corporate life cycle and the liquidity of the company''s shares. In this research، firms were assigned into growth، maturity and decline stages using four factors of sales growth، capital expenditures، dividends profit ratio and the age of company based on Anthony and Ramesh approach and in accordance with the methodology of Park and Chen (2006). In various researches such as Marshall (2006)، Chan and Faff (2003)، Baker and Stein (2003) and Datar et al. (1998) the circulation rate criterion is used as a measure of liquidity. In this study، collected data was analyzed in three stages. First، a sample of companies has been classified by growth، maturity and decline stages. Then the level of liquidity of the company for each group was examined. At the end، for testing the hypotheses، the central index comparison testing of more than two independent group was used. The results of 459 years-company during the period of 2009 to 2011 show that corporate stock liquidity during the periods of growth and maturity is alike، while the former is higher during maturity.