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Determinants of Leverage Maturity Structure of Uruguayan Non-financial Firms

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  • Miguel Mello Costa

    (Banco Central del Uruguay)

Abstract

The purpose of this paper is to study the decision of Uruguayan non-financial firms regarding the temporal dimension of the financing structure, this is, to characterize the temporal structure of Uruguayan nonfinancial firm’s leverage. The paper mainly, analyze the interaction of long-term financial leverage with the other type of external financing of the firm and with the use of own capital. I used a unique panel database that is a merge of the Annual Economic Activity Survey and the Credit Risk Center managed by the Central Bank of Uruguay. The sample covers the period 2011-2014, for this period there is complete balance sheet information. The different external financing options for the firms are complementary to the long-term leverage. In turn, the use of the firm’s own capital is a substitute for long-term leverage. On the side of the demand for long-term credit, firms with higher profitability prefer to finance themselves with their own capital and those with lower profitability turn to external financing to the firm.

Suggested Citation

  • Miguel Mello Costa, 2018. "Determinants of Leverage Maturity Structure of Uruguayan Non-financial Firms," Documentos de trabajo 2018006, Banco Central del Uruguay.
    • Handle: RePEc:bku:doctra:2018006
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    File URL: https://www.bcu.gub.uy/Estadisticas-e-Indicadores/Documentos%20de%20Trabajo/6.2018.pdf
    File Function: First version, 2018
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    References listed on IDEAS

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    Cited by:

    1. Miguel Mello Costa, 2018. "An Empirical Analysis of the Maturity of Debt Supply in Uruguay," Documentos de trabajo 2018005, Banco Central del Uruguay.

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    More about this item

    Keywords

    Financial structure; leverage; indebtedness; panel data; corporate finance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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