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.