The Impact of Debt Maturity Structure on Startup Profitability

Abstract

Companies that are just starting out have a better chance of success by taking advantage of the various financial resources available to them. In terms of economic impact, the study of start-ups is considered a positive viewpoint in terms of the positive changes they generate in terms of cash flow as they enable the expansion of economic operations in the Asian region. Debt financing is one form of financing and research on debt financing for start-ups can help them to grow. When a start-up is allowed to take on debt, it is generally assumed that the company will have a reasonable chance of achieving its operational goals and repaying its debts. This chapter presents the results and discussion of the empirical analysis, selecting the FEM as the best model for this study through the p-value and Hausman tests, using the FEM to derive regression results and finally using stability tests to ensure robustness of the results by swapping both dependent and control variables. The study delves into the structure of debt maturities, the findings are that the debt maturity structure has a negative impact on the profitability of start-ups.