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Corporate Debt Maturity Choice in Transition Financial Markets Author info | Abstract | Publisher info | Download info | Related research | Statistics Andreas Stephan
Oleksandr Talavera
Andriy Tsapin
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This paper investigates the determinants of liability maturity choice in transition markets. We formulate a model of firm value maximization that describes managers' choice of optimal debt structure. The theoretical predictions are tested using a unique panel of 4,300 Ukrainian firms during the period 2000-2005. Our estimates confirm the importance of liquidity, signaling, maturity matching, and agency costs for the liability term structure of firms operating in a transition economy. In addition, we find that companies do not react uniformly to determinants of debt maturity. Firms that mainly rely on external funds are sensitive to signaling and they consider the variability of firm value an important determinant of their debt maturity choice. For less constrained companies that rely more on internal funding, asset maturity is an essential determinant of debt structure.
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number
784.
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Length: 36 p.
Date of creation: 2008Date of revision:
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Keywords: Debt maturity ; capital structure ; transition period ; Ukraine ; Other versions of this item:
Find related papers by JEL classification: G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure G30 - Financial Economics - - Corporate Finance and Governance - - - General D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
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Stephan, Andreas & Tsapin, Andriy & Talavera, Oleksandr, 2009.
"Why Do Firms Switch Their Main Bank? - theory and evidence from Ukraine ,"
Working Paper Series in Economics and Institutions of Innovation
180, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
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