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Effects of foreign ownership and International Financial Reporting Standards on debt maturity in Chilean firms

Author

Listed:
  • Jorge A. Munoz-Mendoza
  • Sandra M. Sepúlveda-Yelpo
  • Carmen L. Veloso-Ramos
  • Carlos L. Delgado-Fuentealba

Abstract

The objective of this article is to determine the effects of foreign ownership and International Financial Reporting Standards (IFRS) on debt maturity in Chilean companies. The study uses a fractional response model (FRM) on 20,586 companies. The results show foreign ownership has a negative and non-linear effect. Foreign ownership in Chilean firms is a substitute control means in relation to long-term debt. IFRS reduces maturity in large companies and extends them in small and medium enterprises (SMEs). These results suggest it is more important for large firms to control agency conflicts, while it is more important for SMEs to reduce information asymmetry.

Suggested Citation

  • Jorge A. Munoz-Mendoza & Sandra M. Sepúlveda-Yelpo & Carmen L. Veloso-Ramos & Carlos L. Delgado-Fuentealba, 2019. "Effects of foreign ownership and International Financial Reporting Standards on debt maturity in Chilean firms," Estudios Gerenciales, Universidad Icesi, vol. 35(153), pages 416-428, December.
    • Handle: RePEc:col:000129:017768
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    References listed on IDEAS

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    More about this item

    Keywords

    maturity; foreign ownership; firm quality.;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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