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Short‐Term Corporate Debt around the World

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  • MARCO SORGE
  • CHENDI ZHANG
  • KOSTAS KOUFOPOULOS

Abstract

Short‐term corporate debt as a proportion of total debt issued by public firms varies greatly across countries, between 28% in the United States and 78% in China. This paper argues that the interaction between information asymmetry and legal protection of creditors is an important determinant of debt maturity. When short‐term debt plays a dual role as signaling and commitment devices, a reduction in information asymmetry has a larger impact on debt maturity when creditor rights are weaker. We find empirical support for this prediction using firm‐level data from 45 countries around the world.

Suggested Citation

  • Marco Sorge & Chendi Zhang & Kostas Koufopoulos, 2017. "Short‐Term Corporate Debt around the World," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 49(5), pages 997-1029, August.
    • Handle: RePEc:wly:jmoncb:v:49:y:2017:i:5:p:997-1029
    DOI: 10.1111/jmcb.12403
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    References listed on IDEAS

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