Crash risk and debt maturity: evidence from Australia
International Journal of Managerial Finance
ISSN: 1743-9132
Article publication date: 7 July 2020
Issue publication date: 29 April 2021
Abstract
Purpose
The purpose of this paper is to examine the association between debt maturity structure and stock price crash risk in Australia.
Design/methodology/approach
The authors employ panel data estimation with industry and year fixed effects. The paper uses a sample of 1,548 publicly listed Australian firms (8,661 firm-year observations) covering the 2000–2015 period.
Findings
Stock price crash risk is positively and significantly associated with the long-term debt maturity structure of firms. In addition, this positive association is more pronounced for firms with a more opaque information environment.
Originality/value
This is the first study to examine stock price crash risk in Australia. The findings are value relevant as it uncovers how debt maturity structure affects shareholders' wealth protection.
Keywords
Acknowledgements
The authors would like to thank the Editor and anonymous reviewers for many helpful comments and suggestions. They are also grateful to Ronghong Huang, Adrian Cheung, Ahsan Habib and Robert Durand for the helpful comments.Funding: This research was supported by 2017 AFAANZ Research Grants. The usual disclaimer applies.
Citation
Hasan, M., Rahman, D., Taylor, G. and Oliver, B. (2021), "Crash risk and debt maturity: evidence from Australia", International Journal of Managerial Finance, Vol. 17 No. 3, pp. 377-400. https://doi.org/10.1108/IJMF-12-2019-0467
Publisher
:Emerald Publishing Limited
Copyright © 2020, Emerald Publishing Limited