The Financial Crisis and Corporate Debt Maturity

Abstract

This paper shows the relevance of the financial crisis on firm- and country-level determinants on debt maturity structure for 39 countries during the period 1995-2012. Corporate debt maturity declined during the financial crisis. However, the financial crisis had a positive effect on the corporate debt maturity of smaller firms. Cross-firm and cross-country differences exerted an influence on the effect of the financial crisis on corporate debt maturity. Legal enforcement and bank concentration reduced the negative impact of the financial crisis on debt maturity in line with the efficiency of the legal system and relationship banking reducing the firm’s credit constraints following the financial crisis. We also show that the effect of the financial crisis on debt maturity increased with the decline in economic activity during the crisis.