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The determinants of corporate debt maturity: evidence from UK firms

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  • Aydin Ozkan
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    Abstract

    This paper investigates the empirical determinants of corporate debt maturity structure. This is done by testing several leading theoretical models of debt maturity structure using a cross-sectional data set of 321 non-financial UK firms. The evidence lends considerable support to the prediction that the impact of firm size on debt maturity is positive. The findings also provide support for the notion that firms match the maturity structure of their debt to that of their assets. The findings reveal that agency-related costs and volatility of firm value exert a negative impact on debt maturity. The empirical analysis provides no evidence that taxes affect debt maturity structure. Finally, the empirical analysis is not supportive of the signalling hypothesis that firms use their debt maturity structure to signal information to the market.

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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal Applied Financial Economics.

    Volume (Year): 12 (2002)
    Issue (Month): 1 ()
    Pages: 19-24

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    Handle: RePEc:taf:apfiec:v:12:y:2002:i:1:p:19-24

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    Cited by:
    1. Pavel Körner, 2007. "The Determinants of Corporate Debt Maturity Structure: Evidence from Czech Firms (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 57(3-4), pages 142-158, June.
    2. Deesomsak, Rataporn & Paudyal, Krishna & Pescetto, Gioia, 2009. "Debt maturity structure and the 1997 Asian financial crisis," Journal of Multinational Financial Management, Elsevier, vol. 19(1), pages 26-42, February.
    3. Stephan, Andreas & Talavera, Oleksandr & Tsapin, Andriy, 2011. "Corporate debt maturity choice in emerging financial markets," The Quarterly Review of Economics and Finance, Elsevier, vol. 51(2), pages 141-151, May.
    4. Guerrero, Federico, 2007. "Early-stage financial globalization and corporate debt maturity: The case of South Korea, 1980-1994," Journal of Asian Economics, Elsevier, vol. 18(5), pages 809-824, October.
    5. Federico Guerrero & Elliott Parker, 2006. "Financial Liberalization and Corporate Debt Maturity in Thailand, 1993-97," Working Papers 06-001, University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics.
    6. Suzan Hol & Nico van der Wijst, 2006. "The financing structure of non-listed firms," Discussion Papers 468, Research Department of Statistics Norway.
    7. Christopher F. Baum & Dorothea Schäfer & Oleksandr Talavera, 2006. "The Effects of Short-Term Liabilities on Profitability: The Case of Germany," Discussion Papers of DIW Berlin 635, DIW Berlin, German Institute for Economic Research.
    8. Federico Guerrero, 2006. "Early-Stage Globalization and Corporate Debt Maturity: The Case of South Korea, 1980-94," Working Papers 06-016, University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics.
    9. Valentín Azofra Palenzuea & Paolo Saona Hoffmann & Eleuterio Vallelado González, 2004. "Estructura De Propiedad Y Oportunidades De Crecimiento Como Determinantes Del Endeudamiento De Las Empresas Chilenas," Abante, Escuela de Administracion. Pontificia Universidad Católica de Chile., vol. 7(2), pages 105-145.
    10. Andreas Stephan & Oleksandr Talavera & Andriy Tsapin, 2008. "Corporate Debt Maturity Choice in Transition Financial Markets," Discussion Papers of DIW Berlin 784, DIW Berlin, German Institute for Economic Research.
    11. Maria-Teresa Marchica, . "Debt Maturity and the Characteristics of Ownership Structure: An Empirical Investigation of UK Firms," Discussion Papers 05/29, Department of Economics, University of York.

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