Debt Maturity, Risk, and Asymmetric Information

Allen Berger (), Marco A. Espinosa‐vega, W Frame and Nathan H. Miller
Authors registered in the RePEc Author Service: Marco Espinosa-Vega ()

Journal of Finance, 2005, vol. 60, issue 6, 2895-2923

Abstract: We test the implications of Flannery's (1986) and Diamond's (1991) models concerning the effects of risk and asymmetric information in determining debt maturity, and we examine the overall importance of informational asymmetries in debt maturity choices. We employ data on over 6,000 commercial loans from 53 large U.S. banks. Our results for low‐risk firms are consistent with the predictions of both theoretical models, but our findings for high‐risk firms conflict with the predictions of Diamond's model and with much of the empirical literature. Our findings also suggest a strong quantitative role for asymmetric information in explaining debt maturity.

Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (138)

Downloads: (external link)
https://doi.org/10.1111/j.1540-6261.2005.00820.x

Related works:
Working Paper: Debt Maturity, Risk, and Asymmetric Information (2005)
Working Paper: Debt maturity, risk, and asymmetric information (2004)
Working Paper: Debt maturity, risk, and asymmetric information (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jfinan:v:60:y:2005:i:6:p:2895-2923

Ordering information: This journal article can be ordered from
http://www.afajof.org/membership/join.asp

Access Statistics for this article

More articles in Journal of Finance from American Finance Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().