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Debt maturity across firm types: Evidence from a major developing economy

Cuneyt Orman () and Bülent Köksal ()

Emerging Markets Review, 2017, vol. 30, issue C, 169-199

Abstract: Existing literature provides little guidance on whether various debt maturity theories are useful in understanding the debt maturity choices of firms that are privately-held, small, and/or outside the manufacturing industry in developing economies. This paper conducts a comparative test of the major debt maturity theories using a firm-level dataset that covers a wide variety of firm types in a major developing economy, Turkey. Our findings provide considerable support for the liquidity risk, agency, and maturity-matching theories. The macroeconomic environment also has an important impact on debt maturity. The evidence for the signaling and tax theories, however, is weak at best.

Keywords: Debt maturity structure; Nonfinancial firms; Firm heterogeneity; Developing economy; Turkey (search for similar items in EconPapers)
JEL-codes: G3 G32 (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:ememar:v:30:y:2017:i:c:p:169-199