Financial constraints, corporate debt maturity and firm performance: the case of firms in Southeast Asian countries (original) (raw)

Determinants of Corporate Debt Maturity in Asia Pacific

2014

This study is aimed to analyze factors that determine debt maturity. Since the asymmetric information level in Asia Pacific is higher compare to U.S. and Europe, the debt maturity decision become riskier. This study is using 13 different regression model, all sample, listed and crisis, listed and non crisis, non listed and crisis, non listed and non crisis, listed with performance and crisis, listed with performance and non crisis, listed high leverage, listed high leverage and crisis, listed high leverage and non crisis, listed low leverage, listed low leverage and crisis, listed low leverage and non crisis. This paper investigates the determinants of debt maturity for all loan sample in Asia Pacific during 2006-2010, using ordinary least square method to support the results. Based on the research, lenders are proven unable to differentiate between good quality borrowers and bad quality borrowers. Thus, in terms of debt maturity policy, the risk is higher for lenders compare to bor...

Debt Financing and Firm Performance: Evidence from an Emerging South-Asian Country

Business and Economic Research, 2019

This paper aims to empirically investigate the impact of capital structure choice on the firm performance of the firms listed under the Dhaka Stock Exchange of Bangladesh. Multiple regression has been employed in this research to determine the relationship between the capital structure and the firm’s financial performance. Three ratios of financial performance, i.e., return on assets, return on equity, and gross margin, have been used as a sample of non-financial Bangladeshi companies, selected from 2010 to 2015. The study records numerous findings. First, the result shows a significant negative influence of long-term debt (LTD) and total debt (TTD) on firm financial performance measured by return on assets (ROA), but no significant relationship is found between short-term debt (STD) and this measure of firm’s financial performance. Moreover, the research found that there is no significant effect of short-term debt, long-term debt and total debt on the firm financial performance mea...

The Determinants of Corporate Debt Maturity for NSE-Listed Corporates

FIIB Business Review

The maturity structure of corporate debt is one of the significant financing choices that a firm must make simultaneously while deciding how to finance its operational and investment decisions. Even though the capital structure is one of the scrutinized topics of interest in the area of corporate finance literature, there are scarce studies investigating corporate debt maturity—even less so in the context of emerging markets. The choice of a suitable debt maturity structure is extremely relevant for firms as it can enable them to avoid mismatch by aligning assets in line with liabilities, address agency related problems, sidestep the ill effects of cost of capital and signal about the firms’ earning quality and value. The study investigates the firm-specific and macroeconomic determinants that are significant for a debt maturity structure of Indian corporate firms. A sample of 29 non-financial firms listed on the National Stock Exchange during the period 2008–2016 was taken to test ...

The determinants of corporate debt maturity structure: A case study of Pakistan

AFRICAN JOURNAL OF BUSINESS MANAGEMENT, 2012

This paper investigates the determinants of the maturity structure of Czech corporate debt. A theoretical section provides an overview of contemporary theories on corporate debt maturity structure. An empirical section describes an econometric model that shows that long-term debt increases with company size and leverage and asset maturity. The impact of growth options, collateralizable assets, corporate-tax rate, and company-level volatility proves statistically insignificant. Finally, the paper discusses the limitations of the results in terms of data, variables, and determinants.

Impact of Debt Maturity on Firm Performance Evidence from Pakistan

2020

The manuscript is articulated to check the impact of debt maturity on organization performance. In today's cut throat competition, organizations need high performance. The study tends to measure the effects of debt maturity over the organization performance. For this purpose, data was collected from non-financial scheduled firms in Pakistan stock exchange for the period of 2014-2018. To find the good results estimation techniques used were Stata11 software for regression analysis. The research found that operating cycle and growth have a considerable effect on the dependent variable i.e. debt maturity while asset maturity, size and tax have an insignificant effect on debt maturity. It is concluded that long term debt is better for the growth.

Capital Structure and Debt Maturity: Evidence from Emerging Markets

2006

This paper analyses the joint determination of capital structure and debt maturity of the firm for a large sample of countries from Latin America and Eastern Europe. To our knowledge this is the first time such study has been attempted for a multi-country emerging market sample. Employing dynamic panel data analysis, we test Barclay, Marx, and Smith Jr.'s (2003) model of joint capital structure and debt maturity determination using the Generalized Method of Moments on a system of structural equations. The empirical results support three main findings. First, capital structure and debt maturity are policy complements in Latin America and policy substitutes in Eastern Europe. Second, there is a substantial dynamic component in the determination of the endogenous variables that have been neglected by previous research.

Corporate Debt Maturity Structure The Role of Firm2017

An appropriate debt maturity structure is essential for firms to enable them align asset structure to liabilities to prevent a mismatch. This study investigates the role of firm-level and institutional variables on debt maturity structure in selected African countries. Using panel generalised method of moment that addresses endogeneity problem; our findings reveal a dynamic process of adjustment to optimal debt maturity structure. Furthermore, firm-level variables (leverage, asset structure and firm size) provide support for the contracting cost, signalling and matching principle theories of debt maturity structure. Results of institutional variables suggest that better developed institutions promote long-term debt maturity structures.

The Romanian Economic Journal The Determinants of Corporate debt maturity: a study on listed companies of Bombay Stock Exchange 500 index

The study was intented to identify the determinants of the debt maturity structure of listed firms in Bombay Stock Exchange 500 index. For the analysis we have taken 321 firms during the period 2002-2011, comprising of a panel model with fixed effects. We also used GMM (1991) and GMM (1998) estimates of our analysis. The result of robustness tests confirms that past year debt maturity, leverage and growth opportunities are directly determined the debt maturity of Indian firms. Liquidity, effective tax and rate prime lending rate are negatively determining the debt maturity of Indian companies.

The Determinants of Corporate Debt Maturity Structure

SSRN Electronic Journal, 2003

This paper investigates the determinants of the maturity structure of Czech corporate debt. A theoretical section provides an overview of contemporary theories on corporate debt maturity structure. An empirical section describes an econometric model that shows that long-term debt increases with company size and leverage and asset maturity. The impact of growth options, collateralizable assets, corporate-tax rate, and company-level volatility proves statistically insignificant. Finally, the paper discusses the limitations of the results in terms of data, variables, and determinants.

Leverage and the Maturity Structure of Debt in Emerging Markets

Journal of Mathematical Finance, 2013

The aim of this paper is to analyse for a multi-country large emerging market sample the choice between debt and equity simultaneously with the decision between short-and long-term debts. In order to investigate the joint decision among leverage and maturity, we examine an unique sample of 986 firms and 13,490 firm-year observations from Latin America and 686 firms and 7919 firm-year observations from Eastern Europe for the period 1990-2003. We employ dynamic panel data analysis using Generalized Method of moments. The empirical results support three main findings. First, the cross-effects between leverage and maturity behave exactly the opposite between Latin America and Eastern Europe sub-samples. Capital structure and debt maturity are policy complements in Latin America and substitutes in Eastern Europe. Second, there is a significant dynamic effects component in the determination of leverage and maturity. Finally, adjustment to the target maturity is by no means costless and instantaneous with firm facing moderate adjustment costs.