The Determinants of Debt Maturity Structure: Evidence from France, Germany and the UK


  • We are grateful to John Doukas (the editor), George Philippatos, David Wright, Andrew Roper, Benjamin Esty and an anonymous referee for their valuable comments and suggestions on earlier versions of this paper. Any remaining errors are our own. Please address correspondence to Krishna Paudyal, Centre for Empirical Research in Finance, Durham Business School, Mill Hill Lane, Durham, DH1 3LB, UK


We examine the determinants of the debt maturity structure of French, German and British firms. These countries represent different financial and legal traditions that may have implications on corporate debt maturity structure. Our model incorporates the factors representing three major theories (tax considerations, liquidity and signalling, and contracting costs) of debt maturity. It also controls for capital market conditions. The results confirm the applicability of most theories of debt maturity structure for the UK firms. However, the evidence from France and Germany are mixed. Overall the findings suggest that the debt maturity structure of a firm is determined by firm-specific factors and the country's financial systems and institutional traditions in which it operates.