This paper evaluates the relationships of liquidity, firm size, price change, asset maturity and leverage relative to debt maturity for a sample of U.S. non-financial firms. Secondarily, the objective of the research is to identify any measurable changes in firms' behavior during the 2008-2009 financial crisis with respect to their choice of debt maturity. During the period from 2002 through 2009, data from the sampled firms show significant correlations between liquidity, firm size, asset maturity, and leverage and debt maturity. That is, firms appear to consider liquidity risk when determining the maturity of liabilities. Firms also appear to make an effort to signal their value to the market as a way to reduce mispricing of securities due to information asymmetry. This research therefore provides additional support for the liquidity risk hypothesis, as well as the signaling hypothesis. During the crisis itself, changes in the variables tested did not cause firms to make notable modifications in their behavior, with two exceptions. Firms with increased leverage ratios tend to have longer debt maturity, and this association is even more significant during the crisis. In addition, firms with reduced asset maturity turned to longer-term debt. The recent financial crisis did not appear to significantly affect the other determinants of corporate debt structure. Leverage and asset maturity, however, had a greater impact on firms' decisions during the financial crisis, suggesting that changes in the economic environment affect these determinants individually, but not broadly.
Amanda E. Willsey and Dona Siregar. "The Effects Of The 2008-2009 Financial Crisis On U.S. Corporate Debt Structure." New York Economic Review. vol. 43, Fall 2012, p. 16-32
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