Strategic deviation and debt maturity structure

Sagira Sultana Provaty; Shabnaz  Amin; Mostafa Monzur Hasan

doi:10.1016/j.frl.2022.103317

Strategic deviation and debt maturity structure

Sagira Sultana Provaty, Shabnaz Amin, Mostafa Monzur Hasan^*

^*Corresponding author for this work

Department of Accounting and Corporate Governance

Research output: Contribution to journal › Article › peer-review

14 Citations (Scopus)

Abstract

We examine the relationship between strategic deviation and debt maturity structure. Using a large sample of US publicly listed firms from 1981 to 2020, we find that strategic deviation is positively associated with short-term debt. We also find that this relationship is driven by both direct and indirect channels (information asymmetry and corporate governance channels). Our finding remains robust to a series of sensitivity analyses and endogeneity tests. Taken together, we show that strategic deviation has crucial effects on corporate financing decisions.

Original language	English
Article number	103317
Pages (from-to)	1-9
Number of pages	9
Journal	Finance Research Letters
Volume	50
Early online date	8 Sept 2022
DOIs	https://doi.org/10.1016/j.frl.2022.103317
Publication status	Published - Dec 2022

Keywords

Strategic deviation
corporate governance
debt maturity
information asymmetry

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10.1016/j.frl.2022.103317

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title = "Strategic deviation and debt maturity structure",

abstract = "We examine the relationship between strategic deviation and debt maturity structure. Using a large sample of US publicly listed firms from 1981 to 2020, we find that strategic deviation is positively associated with short-term debt. We also find that this relationship is driven by both direct and indirect channels (information asymmetry and corporate governance channels). Our finding remains robust to a series of sensitivity analyses and endogeneity tests. Taken together, we show that strategic deviation has crucial effects on corporate financing decisions.",

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AU - Hasan, Mostafa Monzur

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N2 - We examine the relationship between strategic deviation and debt maturity structure. Using a large sample of US publicly listed firms from 1981 to 2020, we find that strategic deviation is positively associated with short-term debt. We also find that this relationship is driven by both direct and indirect channels (information asymmetry and corporate governance channels). Our finding remains robust to a series of sensitivity analyses and endogeneity tests. Taken together, we show that strategic deviation has crucial effects on corporate financing decisions.

AB - We examine the relationship between strategic deviation and debt maturity structure. Using a large sample of US publicly listed firms from 1981 to 2020, we find that strategic deviation is positively associated with short-term debt. We also find that this relationship is driven by both direct and indirect channels (information asymmetry and corporate governance channels). Our finding remains robust to a series of sensitivity analyses and endogeneity tests. Taken together, we show that strategic deviation has crucial effects on corporate financing decisions.

KW - Strategic deviation

KW - corporate governance

KW - debt maturity

KW - information asymmetry

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DO - 10.1016/j.frl.2022.103317

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JO - Finance Research Letters

JF - Finance Research Letters

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Strategic deviation and debt maturity structure

Abstract

Keywords

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