How do managerial incentives affect the maturity structure of corporate public debt?

Takanori Tanaka

Pacific-Basin Finance Journal, 2016, vol. 40, issue PA, 130-146

Abstract: I examine the relation between managerial ownership and the maturity structure of corporate public debt by using a sample of newly issued Japanese corporate bonds. Firms with higher managerial ownership issue shorter maturity bonds. In addition, firms with higher managerial ownership have lower credit ratings and experience higher yield spreads. Finally, firms with higher managerial ownership exhibit higher firm performance and show a preference for risk-taking activities. Overall, my findings support the view that bondholders are concerned about wealth transfers from bondholders to shareholders through risk-taking activities and require firms with higher managerial ownership to issue shorter maturity bonds.

Keywords: Public debt maturity; Managerial ownership; Credit ratings; Yield spreads; Firm performance; Risk - taking (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:40:y:2016:i:pa:p:130-146

DOI: 10.1016/j.pacfin.2016.10.002

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