The Determinants of Debt Maturity in Australian Firms

Accounting & Finance, Forthcoming

31 Pages Posted: 19 Dec 2010

See all articles by Jamie Alcock

Jamie Alcock

The University of Sydney Business School; Centre for International Finance and Regulation (CIFR)

Frank Finn

University of Queensland - Business School

Kelvin Jui Keng Tan

University of Queensland - Business School; Financial Research Network (FIRN)

Multiple version iconThere are 2 versions of this paper

Date Written: December 19, 2010

Abstract

We examine the determinants of debt maturity in the Australian capital market with the Top 400 firms listed on the Australian Securities Exchange for the period 1989 to 2006. We find that Australian firms not only exhibit a positive leverage-maturity relationship but also use short-term debt to signal their high quality to the market. Our results are robust to different estimation methods that control for endogeneity and error-dependence. We also find that ignoring the interaction between leverage and maturity can lead to erroneous conclusions about the support for the matching principle, the agency costs hypothesis and the transaction costs hypothesis.

Keywords: Debt Maturity, Capital Structure

JEL Classification: G32, G01

Suggested Citation

Alcock, Jamie and Finn, Frank and Tan, Kelvin Jui Keng, The Determinants of Debt Maturity in Australian Firms (December 19, 2010). Accounting & Finance, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1728565

Jamie Alcock (Contact Author)

The University of Sydney Business School ( email )

Cnr. of Codrington and Rose Streets
Sydney, NSW 2006
Australia

Centre for International Finance and Regulation (CIFR) ( email )

Level 7, UNSW CBD Campus
1 O'Connell Street
Sydney, NSW 2000
Australia

Frank Finn

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Kelvin Jui Keng Tan

University of Queensland - Business School ( email )

Brisbane, Queensland 4072
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

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