Debt maturity and the effects of growth opportunities and liquidity risk on leverage

• 成果类型: Article
• 署名作者: Johnson, SA
• 署名单位: Louisiana State University System; Louisiana State University
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/16.1.209
• 发表日期: 2003
• 页码: 209
• 关键词: optimal capital structure; corporate-finance; determinants

摘要

I test the hypothesis that short debt maturity attenuates the negative effect of growth opportunities on leverage. Using simultaneous equations with leverage and maturity endogenous, I find strong support for an economically significant attenuation effect. The negative effect of growth opportunities on leverage for firms with all shorter-term debt is less than one-sixth as large as the effect for firms with all longer-term debt. Short maturity also increases liquidity risk, however, which negatively affects leverage. The results suggest that firms trade off the cost of underinvestment problems against the cost of liquidity risk when choosing short maturity.