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Debt Maturity and the Characteristics of Ownership Structure: An Empirical Investigation of UK Firms

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  • Maria-Teresa Marchica
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    Abstract

    This work investigates the relationship between debt maturity and the characteristics of ownership in a sample of 700 UK non-financial listed firms for the period 1991-2001. The reported results suggest that there is a significant U-shaped relationship between short-term debt and managerial ownership, which seems to be robust when we analyse the debt decisions of high leverage firms. Moreover, we provide evidence of a significant negative relation between short-term debt and large external shareholdings. Our results tend also to support the hypothesis that the identity of large non-managerial shareholders matters in debt maturity choices. Finally, the analysis reveals that large amounts of bank debt in the capital structure induce firms to have long-term credit, but this effect may be moderate when firms deal with multiple banks.

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    Paper provided by Department of Economics, University of York in its series Discussion Papers with number 05/29.

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    Handle: RePEc:yor:yorken:05/29

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    Keywords: Debt maturity structure; ownership and control structure; panel data; GMM;

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