Determinants of corporate debt maturity in Latin America

摘要

Purpose - The purpose of this paper is to test the main theories of corporate debt maturity in a multi-country framework, in an attempt to understand country-specific constraints. Design/methodology/approach - Dynamic panel data analysis estimated by the generalized method of moments, techniques that account properly for cross-section and time series variation allowing for dynamic effects. Findings - There is a substantial dynamic component in the determination of a firm's maturity structure; firms face moderate adjustment costs towards its optimal maturity, and the determinants of maturity structure and their effects are similar between Latin American countries and the USA; and there is a partial empirical support for each of the theoretical hypotheses tested. Research limitations/implications - Firm ownership, accounting standards, financial market depth, and the degree of supervision on financial reporting may vary across countries, which may affect the quality and consistency of some variables. Practical implications - Firms face costs in adjusting the maturity of their debt, which gives such decision a long-term character, and the determinants of debt maturity do not seem very sensitive to a country's business and financial environment. Originality/value - The paper focuses on a sample of developing countries that have so far been ignored in empirical studies, employs empirical techniques that account properly for cross-section and time series variation, and the model allows for dynamic effects that have seldom been considered in previous research.