Corporate Debt Maturity Structure: The Role of Firm Level and Institutional Determinants in Selected African Countries. Issue 4 (2nd October 2017)

• Record Type: Journal Article
• Authors: Etudaiye-Muhtar, Oyebola Fatima; Ahmad, Rubi; Matemilola, Bolaji Tunde
• Is Part Of: Global economic review. Volume 46:Issue 4(2017)
• Page Start: 422
• Page End: 440
• Publication Date: 2017-10-02
• Subjects: Debt maturity structure -- contracting cost -- matching principle -- rule of law -- regulatory quality; G32; International economic relations -- Periodicals; Economic history -- 1990- -- Periodicals; East and West -- Periodicals; 337.05
• DOI: 10.1080/1226508X.2017.1350589
• Languages: English
• ISSNs: 1226-508X

Abstract

Abstract: 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.