Is bank‐debt maturity contingent on the financial system?
Academia Revista Latinoamericana de Administración
ISSN: 1012-8255
Article publication date: 29 July 2014
Abstract
Purpose
The purpose of this paper is to determine whether bank debt‐maturity decisions are conditioned by growth opportunities, the firms’ ownership structure, or the institutional environment.
Design/methodology/approach
The empirical analysis is undertaken using an unbalanced panel data of Chilean and Spanish firms.
Findings
The results indicate that when banks are not allowed to become stockholders, managers use bank debt‐maturity as a corporate governance mechanism. When banks can participate in the ownership of the firms that they finance, short‐term bank debt can serve as a substitute for a governance mechanism.
Originality/value
The main contribution of this paper is the analysis of how differences in financial development among countries modify financial decisions by firms.
Keywords
Acknowledgements
The authors are grateful for the comments by: Pablo de Andrés Alonso, Valentín Azofra Palenzuela, José María Fortuna Lindo, Gabriel de la Fuente Herrero, Félix López Iturriaga, Juan Antonio Rodríguez Sanz, and John Manley. The authors are also grateful to two anonymous referees as well as to the participants at EFA annual meeting. They also thank Catherine Ramberg for her editorial assistance. All remaining errors are the sole responsibility of the authors.
Citation
Saona, P. and Vallelado, E. (2014), "Is bank‐debt maturity contingent on the financial system?", Academia Revista Latinoamericana de Administración, Vol. 27 No. 2, pp. 183-208. https://doi.org/10.1108/ARLA-09-2013-0141
Publisher
:Emerald Group Publishing Limited
Copyright © 2014, Emerald Group Publishing Limited