Corporate debt maturity and future firm performance volatility
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 a...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Elsevier
2018
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| Subjects: | |
| Online Access: | http://eprints.sunway.edu.my/940/ http://eprints.sunway.edu.my/940/1/Chaiporn%20Corporate%20Debt%20Maturity.pdf |
| _version_ | 1848801933163233280 |
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| author | Sato, Meg Adachi Vithessonthi, Chaiporn * |
| author_facet | Sato, Meg Adachi Vithessonthi, Chaiporn * |
| author_sort | Sato, Meg Adachi |
| building | SU Institutional Repository |
| collection | Online Access |
| description | 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 firms in 10 developing and developed countries during 1991−2013, we find that corporate debt maturity is negatively associated with future firm operating performance volatility but is not associated with future firm value volatility. |
| first_indexed | 2025-11-14T21:15:19Z |
| format | Article |
| id | sunway-940 |
| institution | Sunway University |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-14T21:15:19Z |
| publishDate | 2018 |
| publisher | Elsevier |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | sunway-9402020-10-12T07:31:07Z http://eprints.sunway.edu.my/940/ Corporate debt maturity and future firm performance volatility Sato, Meg Adachi Vithessonthi, Chaiporn * HF Commerce HG Finance 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 firms in 10 developing and developed countries during 1991−2013, we find that corporate debt maturity is negatively associated with future firm operating performance volatility but is not associated with future firm value volatility. Elsevier 2018 Article PeerReviewed text en cc_by_nc_nd_4 http://eprints.sunway.edu.my/940/1/Chaiporn%20Corporate%20Debt%20Maturity.pdf Sato, Meg Adachi and Vithessonthi, Chaiporn * (2018) Corporate debt maturity and future firm performance volatility. International Review of Economics and Finance. ISSN 1059-0560 (In Press) |
| spellingShingle | HF Commerce HG Finance Sato, Meg Adachi Vithessonthi, Chaiporn * Corporate debt maturity and future firm performance volatility |
| title | Corporate debt maturity and future firm performance volatility |
| title_full | Corporate debt maturity and future firm performance volatility |
| title_fullStr | Corporate debt maturity and future firm performance volatility |
| title_full_unstemmed | Corporate debt maturity and future firm performance volatility |
| title_short | Corporate debt maturity and future firm performance volatility |
| title_sort | corporate debt maturity and future firm performance volatility |
| topic | HF Commerce HG Finance |
| url | http://eprints.sunway.edu.my/940/ http://eprints.sunway.edu.my/940/1/Chaiporn%20Corporate%20Debt%20Maturity.pdf |