The Determinants of Debt Maturity Structure for Chinese Listed Companies

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LIN, WENYI (2020) The Determinants of Debt Maturity Structure for Chinese Listed Companies. [Dissertation (University of Nottingham only)]

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Abstract

The funds from financing are necessary for companies to maintain their business activities in the process of operation and development. Debt financing is a crucial financing method, whose maturity choice is a key element of debt financing decisions. So determiners of debt maturity decision are research priorities, which regard Chinese listed companies as research subject in this article. First, the theories of debt maturity are reviewed, including agency cost theory, signaling and liquidity risks hypothesis, maturity matching principles, and tax theory. Then, variables are determined and hypotheses are proposed by combing these theories and previous research results. Third, data of 1,494 A-shares Chinese listed companies over 8 years between 2012 and 2019 are used as the full sample. And according to the firm scales which is based on the median company size, different periods which are from 2012 to 2015 and from 2016 to 2019, and ownership which are state-owned firms or non-state-owned firms, seven fixed effects models are established.

Finally, the empirical findings show that asset maturity, firm scale, leverage, and working capital ratio (LIQU) have direct relation to debt maturity, which partly support the agency cost theory, signaling and liquidity risks hypotheses, matching principles theory, and tax hypothesis. Although outcomes of interest rates’ term structure is conversely connected to debt maturity, it is inverse to theoretical prediction. In conclusion, firm size, liquidity, leverage, asset maturity, quality, and interest rates’ term structure are a link to debt maturity for Chinese listed companies based on the 0.05 significance level. In the last, the limitations and suggestions of this paper are noted.

Item Type: Dissertation (University of Nottingham only)
Keywords: Debt maturity, Agency cost theory, Signaling and liquidity risks theory, Matching principles, Tax theory, Determinants
Depositing User: Lin, Wenyi
Date Deposited: 14 Apr 2023 13:57
Last Modified: 14 Apr 2023 13:57
URI: https://eprints.nottingham.ac.uk/id/eprint/62714

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