Empirical Investigation of Debt-Maturity Structure: Evidence from Pakistan
AbstractWe examine the empirical determinants of debt-maturity structure of 266 firms listed on the KSE over the period 2000 to 2004 using several variants of dynamic panel data models. We find mixed support for the agency cost hypothesis as our results show that debtmaturity increases with the size of the firm; however, growth options do not have any significant influence on debt-maturity structure. Our results lend unambiguous support to the maturity-matching hypothesis as debt-maturity varies inversely with operating activities and directly with the maturity of long-lived assets. Finally, we find evidence that supports the taxbased hypothesis but no evidence to support the signaling hypothesis. Moreover, the results demonstrate that there is a significant dynamic component in the determination of optimal debt-maturity structure of the sampled firms .
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Bibliographic InfoArticle provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.
Volume (Year): 48 (2009)
Issue (Month): 4 ()
Debt Maturity; Capital Structure; Panel Data; GMM; Pakistan;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
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