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Title:Corporate debt maturity choice in transition financial markets PDF Logo
Authors:Stephan, Andreas
Talavera, Oleksandr
Tsapin, Andriy
Issue Date:2008
Series/Report no.:Discussion papers // German Institute for Economic Research 784
Abstract:This paper investigates the determinants of liability maturity choice in transition markets. We formulate a model of firm value maximization that describes managers' choice of optimal debt structure. The theoretical predictions are tested using a unique panel of 4,300 Ukrainian firms during the period 2000-2005. Our estimates confirm the importance of liquidity, signaling, maturity matching, and agency costs for the liability term structure of firms operating in a transition economy. In addition, we find that companies do not react uniformly to determinants of debt maturity. Firms that mainly rely on external funds are sensitive to signaling and they consider the variability of firm value an important determinant of their debt maturity choice. For less constrained companies that rely more on internal funding, asset maturity is an essential determinant of debt structure.
Subjects:Debt maturity
capital structure
transition period
Ukraine
JEL:G32
G30
D24
Document Type:Working Paper
Appears in Collections:DIW-Diskussionspapiere
Publikationen von Forscherinnen und Forschern des DIW

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