University of Isfahan Financial Accounting Research 2322-3405 10 1 2018 03 21 Risk taking behavior over firm's life cycle and its relation with financial performance using generalized method of moments (GMM) Risk taking behavior over firm's life cycle and its relation with financial performance using generalized method of moments (GMM) 1 18 22534 10.22108/far.2018.85018.0 FA Hamideh Esnaashari Assistant professor, Accounting, Shahid beheshti university, Tehran, Iran Azam Valizadeh Larijani Assistant professor, Accounting, Alzahra University, Tehran, Iran Journal Article 2016 07 23 Risk taking behavior over firm's life cycle and its relationship with financial performance are examined in this research. Life cycle is one of the most important factors which determines properties of firm's behavior and affect its resource structure, empowerments and abilities. So an adjusted version of ROA with regard to industry effect is used to measure risk taking behavior; the pattern of cash flow in each category including operating, investing and financing and ROA proxy are considered to define life cycle and financial performance respectively. As a consequence, financial data for 150 firms during 2008 to 2015 with some considerations is collected. In order to include dynamic behavior of risk taking, generalized method of moments (GMM) is run to analyze data. The results reveal that firms show riskier behavior in introduction and decline phases in comparison with maturity phase. In addition, firms which are in introductory and decline phases operate much weaker than others from financial aspect.  <strong> </strong> Risk taking behavior over firm's life cycle and its relationship with financial performance are examined in this research. Life cycle is one of the most important factors which determines properties of firm's behavior and affect its resource structure, empowerments and abilities. So an adjusted version of ROA with regard to industry effect is used to measure risk taking behavior; the pattern of cash flow in each category including operating, investing and financing and ROA proxy are considered to define life cycle and financial performance respectively. As a consequence, financial data for 150 firms during 2008 to 2015 with some considerations is collected. In order to include dynamic behavior of risk taking, generalized method of moments (GMM) is run to analyze data. The results reveal that firms show riskier behavior in introduction and decline phases in comparison with maturity phase. In addition, firms which are in introductory and decline phases operate much weaker than others from financial aspect.  <strong> </strong> https://far.ui.ac.ir/article_22534_596512fb6eda3fc7acfffb2c9cce6c02.pdf