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In this paper, we investigate whether internal control and whether corporate life cycle would affect firm performance in the emerging markets of China.

We use Chen, Dong, Han, and Zhou’s (2013) internal control index on the effectiveness of internal control and Dickinson’s (2011) definition on firm life cycle. We use multivariate regression analysis.

We find that the internal control improves corporate performance. When dividing firm life cycle into five stages: introduction, growth, mature, shake-out and decline, we find that the impacts of internal control on firm performance vary with different stages. The positive impact of internal control on firm performance is more significant in maturity and shake-out stages than other stages.

Our findings would have implications for the regulators and policy makers with regards to the importance of internal control in corporate governance and the effectiveness of implementing standards and guidelines on internal control in public firms.

In addition, our findings on the various roles of internal control at different stages of firm life cycle would help managers and board of directors find more focus in risk management and board monitoring, respectively.

Although the prior literature have examined the link between internal control, information quality and cost of equity capital (Ashbaugh-Skaife, Collins, Kinney, & LaFond, 2009; Ogneva, Subramanyam, & Raghunandan, 2007), our study would be the first attempt to investigate the link between internal control and firm performance during different stages of firm life cycles.

The central organizing principle for this volume – the industry life cycle model – is so widely accepted and its basic premises so taken for granted that it has become conventional wisdom in business. Executives in a range of industries use the model to guide their thinking about when and how to invest in various industries. Diversification decisions, for example, are often made on the basis of life cycle logic, especially as large, established companies seek high-growth opportunities for investment.

The components of earnings or cash flows have different implications for the assessment of the firm's value. We extend the research for value-relevant fundamentals to examine which financial performance measures convey more information to help investors evaluate the performance and value for firms in different life cycle stages in the high-tech industry. Six financial performance measures are utilized to explain the difference between market value and book value. Cross-sectional data from firms in Taiwanese information electronics industry are used. We find all the six performance measures which are taken from Income Statement and Cash Flow Statement are important value indicators but the relative degrees of value relevance of various performance measures are different across the firm's life cycle stages. The empirical results support that capital markets react to various financial performance measures in different life cycle stages and are reflected on the stock price.

To provide an overview of research published in the management accounting literature on methods for cost management in new product development, such as a target costing, life cycle costing, component commonality, and modular design.

The structured literature search covered papers about 15 different cost management methods published in 40 journals in the period 1990–2013.

The search yielded a sample of 113 different papers. Many contained information about more than one method, and this yielded 149 references to specific methods. The number of references varied strongly per cost management method and per journal. Target costing has received by far the most attention in the publications in our sample; modular design, component commonality, and life cycle costing were ranked second and joint third. Most references were published in Management Science; Management Accounting Research; and Accounting, Organizations and Society. The results were strongly influenced by Management Science and Decision Science, because cost management methods with an engineering background were published above average in these two journals (design for manufacturing, component commonality, modular design, and product platforms) while other topics were published below average in these two journals.

The scope of this review is accounting research. Future work could review the research on cost management methods in new product development published outside accounting.

The paper centers on methods for cost management, which complements reviews that focused on theoretical constructs of management accounting information and its use.

What makes firms innovate their business models? Why do they engage in innovating how they create, deliver, and capture value? And how does such innovation translate into innovation performance? Despite the importance of business model innovation for achieving competitive advantage, existing evidence seems to be confined to firm-level antecedents and pays little attention to the impact of industry structure. This study investigates how different stages of an industry’s life cycle and levels of industry competition affect firms’ business model innovation, and how such innovation translates into innovation performance. Based on a cross-industry sample of 1,242 Austrian firms, we introduce a unique measure for the degree of innovation in a firm’s business model. The results indicate that the degree of business model innovation is highest toward the beginning of an industry life cycle, that is, in the emergent stage. Competitive industry pressures turn out to be negatively related to the degree of business model innovation. Moreover, we find that the degree of a firm’s business model innovation, conditional on it having introduced a new product or process recently, positively influences innovation performance. Our findings contribute to the ongoing dialog on the role of industry structure in business model innovation, and provide implications for the management of business model innovation.

We extend Diamond's (1989, 1991) life-cycle hypothesis to posit that, once they reach the stage of bank borrowing, firms begin with prime loans and evolve toward borrowing more cheaply at LIBOR as they grow larger, less risky and less characterized by asymmetric information. We conduct multinomial logit regressions to explain firms’ membership in one of three groups: prime only, prime and LIBOR, and LIBOR. We also examine spreads over prime and LIBOR and find that loans set up to allow borrowing at prime carry higher spreads than those allowing borrowing at LIBOR. Both sets of tests support the life-cycle hypothesis.

As an answer for the limited growth potentials of diversification and internationalization, services became increasingly important for industrial firms in recent years. Based on existing and established business concepts, companies explore new segments in their traditional value chains beyond traditional market penetration strategies: they pursue service transition strategies to open up new sources for growth, even in markets that do not promise great expansion potential. Our paper addresses the issue of economies of scope of service transition. In this context, we first explore the question, to what extent the insights about product diversification strategies from physical goods sectors can be transferred to the service sector. Using competence-based considerations on diversification we focus on dynamic economies of scope, whose central idea is exploration and development of new resources rather than the static exploitation of existing ones. Furthermore, we integrate the largely neglected issue of how the phenomenon of service diversification depends on the industry's life cycle stage. In a small empirical study of the German mechanical engineering industry we demonstrate that diversification steps into services require a shift in the resource and competence base of firms. Using a dynamic perspective, we construct a conceptual framework for analyzing and explaining the advantages of service transition strategies. The developed model describes a service diversification trajectory and points out that the establishment of a profitable service business requires the exploration and development of competences and adequate organizational structures.

New industries are created from the pioneering activities of a few firms. These firms generally face great uncertainty and risk, but also stand to benefit from early mover advantages due to the preemption of resources. Based on an empirical analysis of a diverse set of consumer and industrial innovations introduced in the U.S. over the past 100 years, we find that entrants during the pre-firm take-off stage (termed Creators) have higher survival rates than later entrants that enter between the firm and sales take-off (termed Anticipators), and both of these entrant types have higher survival rates than firms that enter after the sales take-off (termed Followers). Notably, survival rates for Creators and Anticipators do not depend on entry time within the cohort group, i.e. what matters is whether an entrant enters before or after the take-off, not whether it entered first in its cohort. Our results indicate that there is no real option value in waiting when one considers survival as a performance measure, which bodes well for firms interested in creating new industries.