Research On Determinants For Debt Maturity Structure Of Listed Companies In China

The choice of corporate debt maturity structure is an important part of debtfinancing decisions. When thinking about debt financing, companies have to make achoice between the ways of long-term debt and short-term debt. The theory of debtmaturity choice is to discuss the arrangements of debt maturity structure, in whichcompanies can reduce their liquidity risk, meanwhile they can cut down their financialcosts and save their overall cost of capital, therefore enhance companies’ value.From empirical data, due to the bank-dominated financial structure andcompanies’ preference to equity financing, there are two characteristics in our debtfinancing structure. First, in term of the total quantity of debt, the share of corporatebond financing is too low, while the proportion of bank debt and other liabilities is toohigh; second, for the structure of debt maturity, short-term debts take a rather highproportion for our listed companies. Some companies even never use long-term debts.As to those domestic existing researches on debt maturity, most of them aretrying to find a alternative variable from companies’ inner factors to explain thechoice of domestic corporate debt maturity structure and duration characteristics; themeasuring method of debt maturity structure is basically adopt the ratio of long-termdebt to the total, also known as the sheet method; empirical research is just based onthe simple linear regression models. With the ground of the existing debt maturitychoice theories and related empirical test results from both home and abroad,combining with the operation of China’s financial market and the development ofbond market among banks, this article is trying to find out how relevant factors affectcompanies’ debt maturity structure from two perspectives--company’s characteristicsand timing features, so as to provide evidence for companies’ optimizing debtfinancing structure.First, the paper reviews those classical theories of debt maturity structure andmainstream empirical research literatures. Based on those classical theoryassumptions, it builds a binary choice Logit model to analyze how factors oncorporation level affect the company’s debt maturity structure by using the advancedincremental method of measuring corporate debt maturity structure. It is expected toprovide a decision-making model of reference significance for a company’s choice ofdebt maturity structure. Then, with the corporation incremental debt maturity structure and horizontal maturity structure of debt as the object, this paper analyses theGap-Filling Effect according to the theoretical model. Based on this theoretical model,this paper presents the complementary relations between a company’s debt maturityand the duration of government debt from a macro perspective; then it addscompanies’ characteristic factors to the empirical model, and construct the empiricalanalysis framework based on both micro and macro empirical factors, which willenrich our corporate debt maturity structure research in theory. Finally, based on thetwo aspects of the empirical research findings and the current situations of China’slisted companies’ short-term debt financing and companies’ preference to bank credit,this paper proposes specific measures about how to optimize China’s corporation debtmaturity structure.