Corporate debt maturity: an international comparison of firm debt maturity choices

This paper explores the determinants of debt maturity for a sample of 3306 non- financial listed firms from thirteen European countries (twelve countries of Euro Zone and United Kingdom) in 2011. According to literature, two sets of explanatory variables are included: (i) characteristics of firms and (ii) institutional environment. The firm- level variables are growth opportunities, size, tax, firm value volatility, quality, rating, assets maturity and leverage. The model also includes independent country-level variables about term structure and volatility of interest rates, efficiency and type of legal system, banking sector size, turnover and size of stock market. Overall, our results confirm prior literature predictions about the influence of firm-level variables on firm debt maturity, with the exception of tax and growth opportunities. The results also suggest that the type of legal system has a significant impact on debt maturity and the higher the size of banking system in the economy, the lower the preference of firm for long-term debt. However, we cannot confirm the positive impact of expectations of evolution rate and development level of stock markets on debt maturity.