The Financial Crisis and Corporate Debt Maturity

2014 ◽  
Author(s):  
VVctor M. Gonzzlez
Keyword(s):  
Financial Crisis ◽  
Debt Maturity ◽  
Corporate Debt

scholarly journals Corporate debt maturity and economic development

2019 ◽  
Vol 15 (5) ◽  
pp. 669-687 ◽  
Author(s):  
Celia Álvarez-Botas ◽  
Víctor M. González-Méndez
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Financial Crisis ◽  
Firm Size ◽  
Debt Maturity ◽  
Corporate Debt ◽  
Content Type ◽  
Country Level ◽  
The Relationship ◽  
Bank Concentration

Purpose The purpose of this paper is to analyse the effect of economic development on the influence of country-level determinants on corporate debt maturity, bearing in mind firm size and the period of financial crisis. Design/methodology/approach The authors employ panel data estimation with fixed effects to examine the role of economic development in influencing the relationship between country-level determinants on corporate debt maturity. The paper uses a sample of 30,727 listed firms, belonging to 39 countries, over the period 2005–2012. Findings Corporate debt maturity increases with the efficiency of the legal system and bank concentration and decreases with the weight of banks in the economy. However, the importance of these country determinants is greater in developing than in developed countries. The authors also show that firm size in developed and developing countries influences country determinants of corporate debt maturity. Finally, the results reveal that the financial crisis has affected the debt maturity of firms differently in developed and developing countries, with the effect of bank concentration lengthening debt maturity, this effect being more pronounced in developing countries. Practical implications The findings provide useful insights to guide policy decisions providing access to long-term financing, as corporate debt maturity depends on economic development, institutional environment, banking structure and firm size. Originality/value This study incorporates economic development in explaining the relationship between country-level determinants and corporate debt maturity.

scholarly journals Granularity of Corporate Debt

2020 ◽  
pp. 1-36
Author(s):  
Jaewon Choi ◽  
Dirk Hackbarth ◽  
Josef Zechner
Keyword(s):  
Financial Crisis ◽  
Debt Maturity ◽  
Corporate Bond ◽  
Corporate Debt ◽  
Asset Sales ◽  
Large Sample ◽  
Investment Opportunities ◽  
Bond Issuers ◽  
Recent Financial Crisis ◽  
Substantial Heterogeneity

Abstract We study whether firms spread out debt-maturity dates, which we call granularity of corporate debt. In our model, firms that are unable to roll over expiring debt need to liquidate assets. If multiple small asset sales are less inefficient than a single large one, it can be optimal to diversify debt rollovers across time. Using a large sample of corporate bond issuers during the 1991–2012 period, we establish novel stylized facts and evidence consistent with our model’s predictions. There is substantial heterogeneity (i.e., firms have both concentrated and dispersed debt structures). Debt maturities are more dispersed for larger and more mature firms and for firms with better investment opportunities, higher leverage, and lower profitability. During the recent financial crisis, firms with valuable investment opportunities implemented more dispersed maturity structures. Finally, firms manage granularity actively and adjust toward target levels.

scholarly journals Debt Maturity and the Dynamics of Leverage

2021 ◽  
Author(s):  
Thomas Dangl ◽  
Josef Zechner
Keyword(s):  
Transaction Costs ◽  
Financial Distress ◽  
Cash Flows ◽  
Debt Maturity ◽  
Corporate Debt ◽  
Short Term ◽  
Trade Off ◽  
Maturity Structure

Abstract This paper shows that short debt maturities commit equityholders to leverage reductions when refinancing expiring debt in low-profitability states. However, shorter maturities lead to higher transaction costs since larger amounts of expiring debt need to be refinanced. We show that this trade-off between higher expected transaction costs against the commitment to reduce leverage in low-profitability states motivates an optimal maturity structure of corporate debt. Since firms with high costs of financial distress and risky cash flows benefit most from committing to leverage reductions, they have a stronger motive to issue short-term debt. Evidence supports the model’s predictions.

scholarly journals Corporate debt maturity and stock price crash risk

2017 ◽  
Vol 24 (3) ◽  
pp. 451-484 ◽  
Author(s):  
Viet Anh Dang ◽  
Edward Lee ◽  
Yangke Liu ◽  
Cheng Zeng
Keyword(s):  
Stock Price ◽  
Debt Maturity ◽  
Crash Risk ◽  
Corporate Debt
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