Short-term Corporate Debt Around The World

61 Pages Posted: 3 Apr 2014 Last revised: 26 Dec 2019

See all articles by Marco Sorge

Marco Sorge

World Bank Group - International Finance Corporation

Chendi Zhang

University of Exeter Business School

Kostas Koufopoulos

University of Warwick - Finance Group

Date Written: October 10, 2016

Abstract

Short-term corporate debt as a proportion of total debt issued by public firms varies greatly across countries, between 28% in the U.S. and 78% in China. This paper argues that the interaction between information asymmetry and legal protection of creditors is an important determinant of debt maturity. When short-term debt plays a dual role as signalling and commitment devices, a reduction in information asymmetry has a larger impact on debt maturity when creditor rights are weaker. We find empirical support for this prediction using firm-level data from 45 countries around the world.

Keywords: debt maturity, information sharing, creditor protection, law and finance

JEL Classification: G21, G32

Suggested Citation

Sorge, Marco and Zhang, Chendi and Koufopoulos, Kostas, Short-term Corporate Debt Around The World (October 10, 2016). WBS Finance Group Research Paper No. 220, Available at SSRN: https://ssrn.com/abstract=2418899 or http://dx.doi.org/10.2139/ssrn.2418899

Marco Sorge

World Bank Group - International Finance Corporation ( email )

2121 Pennsylvania Avenue, NW
Washington, DC 20433
United States

Chendi Zhang (Contact Author)

University of Exeter Business School ( email )

Streatham Court
Xfi Building, Rennes Dr.
Exeter, EX4 4JH
United Kingdom

Kostas Koufopoulos

University of Warwick - Finance Group ( email )

Gibbet Hill Rd
Coventry, CV4 7AL
Great Britain

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
799
Abstract Views
3,419
Rank
57,712
PlumX Metrics