The study examines the factors influencing the maturity structure of corporate debt, with a focus on the influence of macroeconomic and firm-specific variables on the decision to issue short-term or long-term debt. This research is based on the work of Barclay and Smith, which explores a dataset from 1992, the point at which the analysis of the seminal paper concludes, to 2023. The aim is to evaluate the relevance of traditional theories in the context of significant macroeconomic changes. The analysis considers the same set of variables as the original study: firm size, growth opportunities, regulatory environment, firm quality and term structure of interest rates. The hypothesis that firms with higher growth prospects tend to prefer short-term debt reduction to mitigate the risks associated with underinvestment is supported by the observation of a negative correlation between growth opportunities and debt maturity. Moreover, the study examines the long-term impact of firm size, with larger firms demonstrating a greater proclivity to issue long term debt, reflecting their enhanced access to capital markets. The impact of post-2008 regulatory changes has yielded mixed results, indicating that firms have inconsistently altered their debt strategies in response to the changing contemporary regulatory landscape. The study identifies alterations in the correlation between debt maturity and macroeconomic variables, particularly the term structure of interest rates, which has proved significant in recent years. This paper contributes to the ongoing discourse on corporate finance by providing contemporary insights into the strategic considerations that companies make when choosing their debt maturity structure.
Date of Award | 18 Oct 2024 |
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Original language | English |
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Awarding Institution | - Universidade Católica Portuguesa
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Supervisor | Leonidas Tsiaras (Supervisor) |
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- Debt maturity structure
- Contracting costs
- Financial regulation
- Economies of scale
- Panel data analysis
- Mestrado em Finanças (mestrado internacional)
Corporate debt maturity structure: a contemporary analysis of macroeconomic and firm-specific influences
Ciafrè, G. (Student). 18 Oct 2024
Student thesis: Master's Thesis