Resource title

Corporate debt maturity choice in transition financial markets

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Resource description

This paper investigates the determinants of liability maturity choice in transition markets. We formulate a model of firm value maximization that describes managers' choice of optimal debt structure. The theoretical predictions are tested using a unique panel of 4,300 Ukrainian firms during the period 2000-2005. Our estimates confirm the importance of liquidity, signaling, maturity matching, and agency costs for the liability term structure of firms operating in a transition economy. In addition, we find that companies do not react uniformly to determinants of debt maturity. Firms that mainly rely on external funds are sensitive to signaling and they consider the variability of firm value an important determinant of their debt maturity choice. For less constrained companies that rely more on internal funding, asset maturity is an essential determinant of debt structure.

Resource author

Andreas Stephan, Oleksandr Talavera, Andriy Tsapin

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Resource publish date

Resource language

eng

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text/html

Resource resource URL

http://hdl.handle.net/10419/27308

Resource license

Adapt according to the presented license agreement and reference the original author.