Crash risk and debt maturity

evidence from Australia

Mostafa Hasan, Dewan Rahman, Grantley Taylor, Barry Oliver

Research output: Contribution to journalArticle

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.
Original languageEnglish
Number of pages24
JournalInternational Journal of Managerial Finance
Early online date6 Jul 2020
DOIs
Publication statusE-pub ahead of print - 6 Jul 2020

Keywords

  • Accounting conservatism
  • Debt maturity
  • Earnings management
  • Idiosyncratic volatility
  • Stock price crash risk

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