An Empirical Study Of The Influence Of Chinese Bond Market On The Debt Maturity Structure Of Listed Firms

Corporate debt maturity structure means the firm’s debt choice different maturities. It is an important proportion of the study of corporate capital structure. The choice of debt maturity structure has strong theoretical and realistic meaning for controlling the cost of the firm and motivating managers. Classical theories of corporate debt maturity structure include agent-cost hypothesis, signaling hypothesis, tax hypothesis, and maturity matching hypothesis. These theories focus on the influences of firm-level characteristics on debt maturity choice. In recent years, scholars start to consider outside factors and the influence of bond market conditions is an important new focus. Because of the distinctive level of development in China, Chinese listed firms also have their distinctive feature of debt maturity structure. Since the reissue of Treasury bond in1981, for a long time Chinese bond market was developing slowly, and the main component of Chinese bond market was Treasury bond and other government bonds. Ordinary listed firms have no access to bond financing. In recent years, the bond market is developing in an unprecedented pace. New kinds of bonds have enabled listed firms to finance by issuing bonds. The freezing of IPO of the last years have also spurred the development of the bond market. Therefore, the influence of bond market conditions has a strong meaning now. This paper absorbs the latest corporate debt maturity theories and test the influence of debt market conditions on debt maturity choices of Chinese listed firms. This paper is roughly divided into the following parts. First we summarize classical theories of corporate maturity structure, the latest theories, and findings of Chinese and foreign empirical studies. Then we discuss the capital structure and debt maturity structure of Chinese listed firms and characteristics of Chinese bond market. Finally we make the empirical study using data of Chinese listed firm and talk about the empirical results. We find that Chinese bond market conditions do have significant influence on the debt maturity structure of Chinese listed firms.