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Effects of foreign ownership and International Financial Reporting Standards on debt maturity in Chilean firms

Jorge A. Muñoz-Mendoza (), Sandra M. Sepúlveda-Yelpo (), Carmen L. Veloso-Ramos () and Carlos L. Delgado-Fuentealba ()

Estudios Gerenciales, 2019, vol. 35, issue 153, 416-428

Abstract: The objective of this article is to determine the effects of foreign ownership and International Financial Reporting Standards (IFRS) on debt maturity in Chilean companies. The study uses a fractional response model (FRM) on 20,586 companies. The results show foreign ownership has a negative and non-linear effect. Foreign ownership in Chilean firms is a substitute control means in relation to long-term debt. IFRS reduces maturity in large companies and extends them in small and medium enterprises (SMEs). These results suggest it is more important for large firms to control agency conflicts, while it is more important for SMEs to reduce information asymmetry.

Keywords: maturity; foreign ownership; firm quality. (search for similar items in EconPapers)
JEL-codes: G30 G23 G34 (search for similar items in EconPapers)
Date: 2019
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