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Debt Maturity, Risk, and Asymmetric Information Author info | Abstract | Publisher info | Download info | Related research | Statistics ALLEN N. BERGER
MARCO A. ESPINOSA-VEGA
W. SCOTT FRAME
NATHAN H. MILLER
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We test the implications of Flannery's (1986) and Diamond's (1991) models concerning the effects of risk and asymmetric information in determining debt maturity, and we examine the overall importance of informational asymmetries in debt maturity choices. We employ data on over 6,000 commercial loans from 53 large U.S. banks. Our results for low-risk firms are consistent with the predictions of both theoretical models, but our findings for high-risk firms conflict with the predictions of Diamond's model and with much of the empirical literature. Our findings also suggest a strong quantitative role for asymmetric information in explaining debt maturity. Copyright 2005 by The American Finance Association.
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Article provided by American Finance Association in its journal The Journal of Finance .
Volume (Year): 60 (2005)
Issue (Month): 6 (December)
Pages: 2895-2923
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Handle: RePEc:bla:jfinan:v:60:y:2005:i:6:p:2895-2923Contact details of provider: Web page: http://www.afajof.org/ More information through EDIRC
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Paper Allen N. Berger & Marco A. Espinosa-Vega & W. Scott Frame & Nathan H. Miller, 2004.
"Debt maturity, risk, and asymmetric information ,"
Finance and Economics Discussion Series
2004-60, Board of Governors of the Federal Reserve System (U.S.).
[Downloadable!] Allen N. Berger & Marco A. Espinosa-Vega & W. Scott Frame & Nathan H. Miller, 2004.
"Debt maturity, risk, and asymmetric information ,"
Working Paper
2004-32, Federal Reserve Bank of Atlanta.
[Downloadable!] Marco Espinosa-Vega & Allen N. Berger & W. Scott Frame & Nathan H. Miller, 2005.
"Debt Maturity, Risk, and Asymmetric Information ,"
IMF Working Papers
05/201, International Monetary Fund.
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