An empirical analysis of corporate debt maturity structure

Research output: Contribution to journalArticle

74 Citations (Scopus)

Abstract

This paper provides an empirical investigation of the maturity structure of corporate debt. A dynamic model is estimated by GMM estimation procedure using data for an unbalanced panel of 429 non-financial UK firms over the period of 1983–96. The evidence provides strong support for the hypotheses that firms with more growth opportunities in their investment sets tend to have more shorter-term debt and firm size exerts a negative impact on debt maturity structure. The results also support the maturity-matching hypothesis that firms match the maturity structure of their debt to the maturity of their assets. There is less support for the view that firms use their debt maturity structure to signal information to the market. We do not find evidence for a negative correlation between taxes and debt maturity. Our results also suggest that firms have long-term target ratios and they adjust to the target ratio relatively fast, which might indicate that the costs of being away from target ratios are significant for firms.

Original languageEnglish
Pages (from-to)197-212
Number of pages16
JournalEuropean Financial Management
Volume6
Issue number2
DOIs
Publication statusPublished - 1 Jan 2000
Externally publishedYes

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Empirical analysis
Debt maturity structure
Corporate debt
Maturity
Short-term debt
Empirical investigation
Costs
Debt maturity
Firm size
Debt
Assets
Tax
Unbalanced panels
Growth opportunities
GMM estimation

Cite this

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An empirical analysis of corporate debt maturity structure. / Ozkan, Aydin.

In: European Financial Management, Vol. 6, No. 2, 01.01.2000, p. 197-212.

Research output: Contribution to journalArticle

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