An agency approach to debt maturity of unlisted and listed firms in the European setting

Casino-Martínez, Alejandro; López-Gracia, José; Mestre-Barberá, Reyes; Peiró-Giménez, Amado

doi:10.1016/j.emj.2018.07.008

Cited by 8 publications

(5 citation statements)

References 40 publications

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“…Moreover, even the external economic distress effects are not only limited to the financial decision. In fact, they also affect the debt maturity settings under the agency cost approach (Casino-Martínez et al, 2018).…”

Section: Capital Structure and Debt Policymentioning

confidence: 99%

Consistency of Debt Policy: An Intrinsic Role of Business Group Affiliation

Rasheed¹,

Khan²,

Naqvi³

et al. 2021

LJB

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The debt structure remains an area of indispensable concern for businesses across the globe. The organizations are facing difficulty to achieve an optimal capital structure due to inconsistent debt policy. This study investigates the firm's debt policy consistency over a period of twenty-two years after its establishment by observing leverage, debt maturity, debt granularity, and debt specialization as important measures. It has employed a unique dataset covering all the non-financial Pakistani firms listing from 1997 to 2018. The results depict that a firm's debt policy remains remarkably consistent over time, confirming that the initially adopted debt policy is a significant determinant of its future debt policies. However, it is noteworthy that the consistency of the debt policy has shown a declining trend due to the firm's age and size. Additionally, we have examined the effect of business group affiliation on the consistency of debt policy, with further segregation in terms of the financial firm's presence in a group or not. The findings show that a group affiliated firm has more access to the debt market than an unaffiliated firm. Further, the existence of a financial firm in a group serves as an extended financial market that help them to survive in a distress situation. This study will assist the managers in understanding the significance of initial debt policy on the continuity of future policies that help them in financial decision-making.

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Section: Capital Structure and Debt Policymentioning

confidence: 99%

Consistency of Debt Policy: An Intrinsic Role of Business Group Affiliation

Rasheed¹,

Khan²,

Naqvi³

et al. 2021

LJB

View full text Add to dashboard Cite

show abstract

“…An optimal debt maturity structure can mitigate agency problems between creditors and managers. When drafting debt contracts, determining debt maturity can mitigate risk-shifting, underinvestment, and overinvestment problems (Casino-Martínez et al, 2019). Shorter debt maturity can reduce agency problems because creditors regularly supervise more debt contract renegotiation.…”

Section: Introductionmentioning

confidence: 99%

“…The financial and economic literature has long recognized that debt contract design can be used as a tool to reduce shareholder-debt-holder agency conflict (Casino-Martínez et al, 2019). Agency conflict between shareholders and debtholders is directly affected by the quality of financial reporting, as more transparent financial reporting reduces the benefits of debt holder information and facilitates efficient monitoring (H. Wang and Zhang, 2017).…”

Section: Introductionmentioning

confidence: 99%

Tax Aggressiveness, Fair Value Accounting, Debt Maturity: Does Integrated Reporting Matter?

Pamungkas

2022

Jurnal Akuntansi

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This study investigates the association between tax aggressiveness, fair value accounting and debt maturity and whether Integrated Reporting (IR) moderates those relationships. This study's methodology is a quantitative approach with multiple linear regression models and panel data. The sample employed in this study is manufacturing companies listed on the Indonesia Stock Exchange (IDX). The type of data used is secondary data sourced from financial statements and annual reports from 2016 to 2020. The sample selection using a purposive sampling method with the number of samples amounted to 595 firm-year observations. This study suggests that tax aggressiveness and fair value accounting have an inverse association with debt maturity. However, IR failed to weaken the negative impact of extensive fair value accounting on debt maturity. The Financial Services Authority (OJK) can consider this study to improve supervision and regulation for better creditor protection through the company's optimal debt maturity policy.

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“…Decisions related to optimal debt maturity can mitigate agency problems between the lender as the principal and the company manager as the agent. The preparation of debt contracts, one of the main components of debt maturity, can mitigate agency problems in the form of underinvestment problems, asset substitution or risk shifting problems, and overinvestment problems (Casino-Martínez et al, 2019). Lower debt maturity can reduce agency problems because lenders can conduct more routine supervision during the debt contract renegotiation process.…”

Section: Introductionmentioning

confidence: 99%

“…Previous studies examine the factors that affect debt maturity include systematic risk (H. Chen et al, 2021), cost stickiness (Habib and Costa, 2021), financial statement's comparability (Do, 2020), green credit policy (Xu and Li, 2020), earnings management (Maurice et al, 2020;Habib and Costa, 2021;Rey et al, 2020), earnings quality (VanKhanh and Hung, 2020;De Meyere et al, 2018), corporate social responsibility (Nguyen et al, 2020), corporate investment (Jungherr and Schott, 2020; Adachi-Sato and Vithessonthi, 2019), policy uncertainty (Datta et al, 2019;Pan et al, 2019), accounting conservatism (Salehi and Sehat, 2019), asset quality (Olibe et al, 2019;Gong and Wei, 2019), and fair value accounting (Ghanbari et al, 2018;Wang and Zhang, 2017). (Casino-Martínez et al 2019), (Manuelli, 2019), and(Kashefi Pour andLasfer, 2019) investigate the effect of country characteristics and macroeconomic factors on debt maturity. (De Meyere et al, 2018) examine the effect of earnings quality on the debt maturity structure.…”

Section: Introductionmentioning

confidence: 99%

The Role of Integrated Reporting in Emerging Market: Earnings Quality and Debt Maturity

Pamungkas

2021

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The maturity structure of debt can have financial and operational consequences for a firm as debt maturity is a key aspect of financial flexibility. Moreover, debt maturity can impact a firm’s ability to undertake long-term productive investments and, as a result, affect economic activity. This study aims to examine the effect of earnings quality on debt maturity and the role of Integrated Reporting (IR) in moderating these effects. This study's methodology is a quantitative approach with multiple linear regression models and panel data. The sample employed in this study is manufacturing companies listed on the Indonesia Stock Exchange (IDX). The type of data employed in this study is secondary data sourced from financial statements and annual reports from 2016 to 2020. The sample selection using a purposive sampling method with the number of samples amounted to 595 firm-year observations. The results of this study suggest that earnings quality does not affect debt maturity. Additional tests show that income maximization companies tend to have shorter debt maturity. However, IR failed to moderate the effect of earnings quality on debt maturity. This study indicates that the Financial Services Authority (OJK) needs to conduct better monitoring and regulation to increase creditor protection through optimal debt policy disclosure from the companies.

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An agency approach to debt maturity of unlisted and listed firms in the European setting

Cited by 8 publications

References 40 publications

Consistency of Debt Policy: An Intrinsic Role of Business Group Affiliation

Consistency of Debt Policy: An Intrinsic Role of Business Group Affiliation

Tax Aggressiveness, Fair Value Accounting, Debt Maturity: Does Integrated Reporting Matter?

The Role of Integrated Reporting in Emerging Market: Earnings Quality and Debt Maturity

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