EconPapers    
Economics at your fingertips  
 

Debt Maturity, Risk, and Asymmetric Information

Marco A Espinosa-Vega, Allen N. Berger, Nathan H. Miller and W. Scott Frame

No 2005/201, IMF Working Papers from International Monetary Fund

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.

Keywords: Loans; Credit; Banking; Bank credit; Small and medium enterprises; WP,risk rating,short-term debt,debt maturity structure,small business (search for similar items in EconPapers)
Pages: 41
Date: 2005-10-01
References: Add references at CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=18020 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
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:imf:imfwpa:2005/201

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Jim Beardow () and Hassan Zaidi ( this e-mail address is bad, please contact ).

 
Page updated 2020-12-02
Handle: RePEc:imf:imfwpa:2005/201