Debt decisions in deregulated industries

Alexei Ovtchinnikov

Journal of Corporate Finance, 2016, vol. 36, issue C, 230-254

Abstract: Deregulation significantly affects firms’ debt decisions. Prior to deregulation, regulated firms depend more on long-term and public debt but reduce this dependence considerably during deregulation. Cross-sectional analysis shows that the lower use of long-term and public debt results from changing firm sensitivities to determinants of debt decisions triggered by deregulation. Consistent with credit and liquidity risk theories of debt maturity, the concave relation between firm quality and debt maturity is attenuated among regulated firms. Inconsistent with these theories, the convex relation between firm quality and public debt issues exists only among regulated firms. I find limited support for other theories.

Keywords: Debt decisions; Debt maturity; Public and private debt issues; Deregulation (search for similar items in EconPapers)
JEL-codes: G32 G38 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Debt Decisions in Deregulated Industries (2013)
Working Paper: Debt Decisions in Deregulated Industries (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:36:y:2016:i:c:p:230-254

DOI: 10.1016/j.jcorpfin.2015.12.010

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