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Market liquidity, credit maturity structure and asset mismatch in manufacturing firms

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  • Yao, Lianjun
  • Qiu, Yuting

Abstract

Based on the period from 2011 to 2021 and considering macroeconomic data, this paper analyzes the relationship between market liquidity and asset mismatch in manufacturing firms. Specifically, this paper reveals that market liquidity can mitigate manufacturing firms` asset mismatch by optimizing credit maturity structure. Further, heterogeneous effects exist in the impact of the policy above, both at a regional and individual level. Market liquidity is crucial in mitigating asset mismatch for companies operating in locations with intense competition among banks and high leverage levels. However, its impact has been minimal in companies with limited bank rivalry and modest borrowing levels.

Suggested Citation

  • Yao, Lianjun & Qiu, Yuting, 2024. "Market liquidity, credit maturity structure and asset mismatch in manufacturing firms," Finance Research Letters, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324004306
    DOI: 10.1016/j.frl.2024.105400
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    References listed on IDEAS

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    1. Han, Bing & Zhou, Yi, 2015. "Understanding the term structure of credit default swap spreads," Journal of Empirical Finance, Elsevier, vol. 31(C), pages 18-35.
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    3. Tiwari, Aviral Kumar & Abakah, Emmanuel Joel Aikins & Karikari, Nana Kwasi & Gil-Alana, Luis Alberiko, 2022. "The outbreak of COVID-19 and stock market liquidity: Evidence from emerging and developed equity markets," The North American Journal of Economics and Finance, Elsevier, vol. 62(C).
    4. He, Feng & Feng, Yaqian & Hao, Jing, 2023. "Corporate ESG rating and stock market liquidity: Evidence from China," Economic Modelling, Elsevier, vol. 129(C).
    5. Qingfu Liu & Yiuman Tse & Kaixin Zheng, 2021. "The impact of trading behavioral biases on market liquidity under different volatility levels: Evidence from the Chinese commodity futures market," The Financial Review, Eastern Finance Association, vol. 56(4), pages 671-692, November.
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    Cited by:

    1. Ren, Yangqiu & Hu, Guoliu & Wan, Qing, 2025. "Can fair competition enhance corporate ESG performance? Evidence from a quasi-natural experiment of China's fair competition review system," Finance Research Letters, Elsevier, vol. 74(C).
    2. Li, Yihao & Chen, Jierong & Wang, Jian, 2025. "Can implementing the new securities law mitigate corporate financial resource mismatch?," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    3. Luo, Jie & Li, Jie, 2025. "How does local government debt governance affect corporate credit mismatches? Evidence from implementing the New Budget Law," Finance Research Letters, Elsevier, vol. 73(C).
    4. Li, Wen & Zhou, Qibo, 2025. "Can capital structure mismatch influence corporate risk-taking? From the prospective of earning management," Finance Research Letters, Elsevier, vol. 73(C).

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