Corporate Debt Maturity and Future Firm Performance Volatility

Autor:	Chaiporn Vithessonthi, Meg Adachi-Sato
Rok vydání:	2015
Předmět:	Finance Ex-ante business.industry Enterprise value Developing country Debt ratio Business Monetary economics Internal debt Debt levels and flows Volatility (finance) Unobservable
Zdroj:	SSRN Electronic Journal.
ISSN:	1556-5068 1991-2013
DOI:	10.2139/ssrn.2629916
Popis:	We propose a simple idea that corporate debt maturity should serve as a good indicator of future firm performance volatility. We show in a simple two-period model that the riskiness of corporate investment is a decreasing function of corporate debt maturity. If “observable” corporate debt maturity and ex ante “unobservable” corporate risk-taking is highly correlated, corporate debt maturity should be highly correlated with “ex post” realized firm performance volatility in following years. Using data on publicly listed firms in 10 developing and developed countries over the period 1991-2013, we find that future firm operating performance volatility decreases as corporate debt maturity increases and that future firm value volatility is not associated with corporate debt maturity. In addition, banking sector development and export intensity of a country play an important role in determining firm operating performance volatility.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::2e94682917769763c1d733d501046a06 https://doi.org/10.2139/ssrn.2629916 Zobrazit plný text záznamu