The Maturity Structure of Corporate Debt

Authors

  • MICHAEL J. BARCLAY,

  • CLIFFORD W. SMITH JR.

    Search for more papers by this author
    • Barclay and Smith are from the William E. Simon Graduate School of Business Administration, University of Rochester, Rochester, New York. We thank the Bradley Policy Research Center at the University of Rochester for financial support.


ABSTRACT

We provide an empirical examination of the determinants of corporate debt maturity. Our evidence offers strong support for the contracting-cost hypothesis. Firms that have few growth options, are large, or are regulated have more long-term debt in their capital structure. We find little evidence that firms use the maturity structure of their debt to signal information to the market. The evidence is consistent, however, with the hypothesis that firms with larger information asymmetries issue more short-term debt. We find no evidence that taxes affect debt maturity.

Ancillary