The Maturity At Issuance Of Corporate Bonds From Sci-Tech Enterprises In China

Turning their continuously updated application technologies into the core competitiveness, using new technologies and new products to develop new markets, the sci-tech enterprises have gradually become the main carriers of China’s technological innovation and important driving force of the economic growth. Rational asset structure and financial arrangements, well-established external financial system and orderly market ecological environment, as well as mature and innovative financial services have become the key to promoting basic technology research, technological achievements and high-tech industrial development. As one of the important aspects of the financial arrangements of the sci-tech enterprises in China, the maturity at issuance of corporate bonds has been influenced by the specific factors of corporate governance, industry characteristics and domestic macroeconomic environment. And the optimal maturity is the result of market forces from supply and demand.Given the debt maturity defined in incremental approach, the paper makes an analysis of the impact of sci-tech enterprises’ financing projects decisions on the choice of the term of the bonds from the perspective of random death and residual rate. And it takes advantage of system-based model to further examine the supply and demand behaviors of debt market participants for funds, as well as the determinants of the maturity of corporate bonds at issuance from sci-tech enterprises while taking the interdependent relation between maturity and leverage into account, based on the industrial characteristics of sci-tech corporates.Corroborating the findings of many previous studies, the simultaneous-equations GMM results in interbank market support most of the hypotheses except for the agency cost hypothesis which dues to the free cash flow, and the matching hypothesis, while the results in stock exchange market only support the residual hypothesis, underinvestment hypothesis and the effects made by macro-economy variables. Constituted by different potential creditors, the interbank market and floor trading market will run different rules of game when sci-tech enterprises access into them to fund themselves. Both parties associating to the corporate bonds from sci-tech enterprises which are issued in interbank market focus more on the effects of future growth opportunities on the at issue maturity. They view the future growth opportunities as options which are possessed of by enterprises, as well as the credit rating associated with the residual rate of random death projects. But the counterparts in stock exchange market pay more attention to investigate the historical or spot financial data which reflect the financing capacity of enterprises, so as to make a series of rational finance arrangements, including the at issue maturity of corporate bonds.