ABSTRACT An increasing body of empirical research indicates that climate risk adversely impacts corporate operations, with financial performance being one of the most immediately affected domains. This study develops a firm-specific climate risk metric by textual analysis of the annual reports of Chinese A-share listed businesses from 2007 to 2023 and empirically investigates the influence of this metric on corporate financial risk. The findings indicate a statistically significant positive correlation between firm-level climate risk exposure and financial risk. Further mechanism tests find three important transmission channels: increased financing constraints, reduced inventory buffer, and more severe debt maturity mismatch. In order to address the issue of endogeneity, this study uses a multi-method identification strategy, which includes instrumental variable estimation, propensity score matching, and a difference-in-differences design based on the implementation of the Paris Agreement. Cross-sectional analysis also shows that the documented effect is more severe for firms with low information transparency and high carbon emissions. In general, this study adds to the existing literature on the climate-finance nexus by providing a micro-level risk transmission framework that can be used for corporate climate resilience planning and regulatory policy design.

At present, the debt problem has become a universal phenomenon worldwide. Both developed economies and emerging markets face potential risks brought about by the expansion of debt scale. As the worlds second-largest economy, China is in the process of transitioning to high-quality development, but the continuous expansion of debt scale and the increasingly prominent issue of structural imbalance have begun to constrain its long-term stable growth. Against this backdrop, this paper first analyzes the common manifestations of debt issues in the global economic environment, then elaborates on the significance of optimizing the debt structure for Chinas high-quality economic development from three dimensions, and further explores the specific mechanisms through which the debt structures of government, enterprises, and households affect the quality of economic growth in terms of resource allocation, stability, and innovation-driven capacity. Finally, it proposes optimization strategies along three paths: improving government debt orientation and management, adjusting corporate debt maturity and financing channels, and regulating household debt scale and direction. These measures aim to provide theoretical support and practical guidance for resolving Chinas debt structure dilemma and promoting sustainable high-quality economic development.

Debt maturity and firms’ environmental behavior: Evidence from the establishment of city commercial banks in China

The long game: CEO-CFO power dynamics and corporate debt maturity choices

Firm births are key drivers of employment growth, productivity gains, and “creative destruction.” We show that setup costs create sizable financial constraints for new firms. When firms face high setup costs, they can only be established by leveraging up and lengthening debt maturity. We empirically confirm these predictions in a large sample of young French firms. Leverage is higher and debt maturity is longer in industries with high setup costs. Last, we show that following an exogenous shock that reduces banks’ supply of long-term loans, there is relatively lower firm creation in manufacturing industries with high setup costs. This paper was accepted by Bo Becker, finance. Funding: This work was supported by Observatoire du financement des entreprises par le marché (OFEM) (NA) and Agence Nationale de la Recherche [Grant F-STAR ANR-17-CE26-0007-01]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2023.03846 .

Purpose This study examines how reporting quality of environmental, social and governance (ESG) matters affects debt maturity structures and investment efficiency in an emerging market context. Design/methodology/approach Using panel data from 609 firm-year observations of non-financial companies listed on the Stock Exchange of Thailand (2019–2023), the study employs regression models based on insights drawn from information asymmetry and agency theories to investigate the links between ESG reporting quality, debt maturity structure and investment behaviour. Findings ESG reporting quality improves investment efficiency, with a more pronounced reduction in overinvestment, while short-term debt maturities mitigate both forms of inefficiency. High-quality ESG reporting moderates the association between short-term debt and investment efficiency by reducing both overinvestment and underinvestment. Research limitations/implications Limited to the Thai non-financial firms and third-party ESG rating, the results reveal that ESG reporting quality enhances investment efficiency and investor/creditor confidence within emerging markets. Practical implications The findings provide new insights for shareholders, managers and policymakers, demonstrating how integrating ESG considerations into corporate strategy mitigates information asymmetry and agency issues, leading to more effective capital allocation. Originality/value To the best of the authors' knowledge, this study is the first to provide empirical evidence on how ESG reporting quality interacts with corporate financing decisions to influence investment behaviour, offering insights beyond existing studies on ESG and investment efficiency.

Egypt has experienced a sharp rise in external debt over the past decade, increasing from USD 55.8 billion in 2015 to over USD 165.3 billion by 2023. Despite maintaining a debt-to-GDP ratio within internationally accepted thresholds (approximately 45% in 2023), the country faces mounting economic distress, including foreign exchange shortages, currency depreciation, and rising debt-servicing burdens. This study argues that Egypt’s crisis stems not from excessive borrowing but from ineffective debt management, particularly the misalignment between debt maturities and the economic returns of financed projects. Using annual data from 2010 to 2023—a period deliberately selected to capture Egypt’s post-2011 political and economic transition—the analysis applies a Vector Autoregression (VAR) model and Granger causality test to explore short-term interactions between short-term and long-term external debt, the exchange rate, and foreign reserves. While the small sample size limits long-term econometric inference, it provides meaningful insights into short-term debt dynamics and liquidity pressures characteristic of Egypt’s current economic phase. The results show that short-term debt exerts significant depreciative pressure on the currency, while long-term debt weakly undermines reserves when tied to non-revenue-generating projects. Policy recommendations emphasize improving debt maturity alignment, enhancing transparency, and linking debt servicing to productive investments.

This study aims to examine and analyze the influence of debt maturity and cash holding on dividend policy, the effect of debt maturity and cash holdings on company value, and the effect of debt maturity and cash holdings on company value through dividend policies in banking sub-sector companies listed on the Indonesia Stock Exchange for the 2020-2023 period. The sampling technique uses the purposive sampling method. Secondary data was obtained from the annual financial statements. The data analysis method uses path analysis with two structural equations to test the direct and indirect influence of independent variables on dependent variables through intervening variables. The results of the structural equation 1 study show that debt maturity has no effect on dividend policy, and cash holdings have an effect on dividend policy. The results of structural equation 2 show that debt maturity affects the value of the company and cash holdings have no effect on the value of the company. The results of the testing of intervening variables show that dividend policy can mediate debt maturity to company value and dividend policy can mediate cash holdings to company value. The predictive ability of the two variables on the dividend policy was 13.6% and the remaining 12.6% was influenced by other variables outside the research model and the predictability of the three variables on the company's value was 15.7% and the remaining 14.7% was influenced by other variables outside the research model.

This paper investigates the use of machine learning (ML) techniques to determine optimal debt capital structures for high-growth renewable energy firms operating in complex and uncertain financing environments. Drawing on a simulated panel dataset that mirrors firm scale, growth dynamics, project risk profiles, credit quality, and macroeconomic conditions, the study applies and compares three modeling approaches linear regression, random forest, and gradient boosting to predict both optimal debt ratios and long-term debt maturity compositions. The analysis integrates permutation-based interpretability methods to ensure transparency and explain the contribution of individual financial and risk variables to model outcomes. Empirical results demonstrate that ensemble learning models substantially outperform the linear benchmark in both predictive accuracy and explanatory power, highlighting their ability to capture nonlinear and interaction effects among firm-level and market variables. Profitability, volatility, project risk, and credit rating emerge as the most influential determinants of capital structure, confirming theoretical expectations from trade-off and pecking order perspectives while revealing more complex patterns than traditional models can detect.

ABSTRACT Few studies examine whether the gap-filling effect, whereby the maturity structure of local government debt shapes corporate debt maturity, also holds in emerging, bank-dominated economies. Using data on Chinese local government financing vehicle (LGFV) bonds from 2009 to 2023, this study examines how the maturity structure of local government debt influences that of corporate debt. The results reveal a pronounced gap-filling effect, whereby longer local government debt maturities systematically crowd out long-term credit resources, raise corporate financing costs, and prompt firms to shorten their debt maturities. This effect is more salient during economic downturns and when local government debt levels are elevated. Heterogeneity analysis shows substantial variation in the gap-filling effect across regions, industries, and firm characteristics. In addition, firms with shorter debt maturities are found to face higher financial risks. This study contributes by providing policy evidence for fiscally decentralized emerging markets: local government maturity choices transmit to firms’ financing structure, implying that local debt management is instrumental for financial stability.

Abstract We are the first to study the interplay between corporate diversification and debt maturity, both theoretically and empirically. Our models predict that diversification mitigates the debt-overhang problem, making long-term debt more attractive in the presence of rollover costs. Using data on 30,135 firms from 1978 to 2022, we find that multi-division firms have debt maturities at least 1 year longer than stand-alone firms, especially when facing debt overhang. Consistent with our predictions, the excess value of Berger and Ofek (1995) and Mansi and Reeb (2002) increases with debt maturity, suggesting that traditional measures of the diversification discount could be misleading.

The impact of organizational capital on corporate debt maturity structure choices

Risk of rising temperature and newly issued debt maturity: size, industry and regional perspective

This study examines how female bank leadership influences firms’ bank debt. We combine bank-level and firm-level data to construct a sample of about 101,000 firms from eleven European countries. Overall, our results indicate that female and male bank leaders allocate credit differently. We find that female bank leadership globally reduces firms’ bank debt. This effect varies with the maturity of bank debt, as female bank leadership contributes to lower long-term bank debt but higher short-term bank debt. We also find that female bank leadership is associated with lower firms’ bank debt only for male-led companies, and that the effect on firm bank debt becomes significantly positive for larger firms. Although greater female bank leadership may reduce access to credit of firms overall, female bank leaders may still implement less risky lending policies and reduce the gender gap in access to credit for female-led firms.

Abstract We study the valuation of corporate securities, i.e. debt and equity, when the debt issued by the firm has a finite maturity date. The equity value has two components: the first corresponds to its value if default is restricted to the maturity date; the second is a premium for early default, prior to that date. Default is optimal when the underlying cash flow generated by the activities of the firm hits an endogenous default boundary, which solves a nonlinear Volterra integral equation. We derive a new valuation formula for debt, which depends on the local time of the cash flow process along the default boundary and is parameterized by the delta of the debt (its derivative with respect to cash flow) along that boundary. We show the debt delta satisfies a linear Volterra integral equation of the first kind. An algorithm for numerical implementation is provided. A sensitivity analysis is carried out in the context of numerical examples to illustrate the behaviours of equity, debt, the default boundary and the debt delta. We find that the equity (debt) value can decrease (increase) with the maturity date, the default boundary can display non-monotone decreasing-increasing behaviour with respect to time, and the debt delta can increase with cash flow in a neighbourhood of the default boundary.

Going concern is important because it determines an entity’s life in the foreseeable future. However, a company under receivership draws concern from the investor as the ability of recovering their investment is questionable. This study aimed to investigate the effect of corporate debt on preservation of going concern status of companies listed in the Nairobi Securities Exchange, Kenya. The study utilized causal research design. Target population was 36 listed companies. Data was analyzed using descriptive and regression statistics. The study found a negative and significant relationship between the cost, size, and duration of corporate debt issued and the Nairobi Securities Exchange firms' ability to continue as a going concern. The study concluded that a rise in market interest rates would make it harder for Nairobi Securities Exchange companies to continue as a going concern. A rise in interest rates would also raise a company's cost of capital, which would reduce its predicted future profitability. Selecting an appropriate debt maturity structure helps NSE-listed companies prevent mismatch by balancing assets and obligations, handle agency-related issues, reduce the negative effects of cost of capital, and communicate the quality of the company's earnings. In order to preserve stability and competitiveness, central banks should take trade dynamics and international economic conditions into account while deciding on the best interest rate policy. When enacting interest rate increases, policymakers should carefully weigh the possible effects and use a comprehensive approach. Policy makers from NSE-listed companies should create guidelines and regulations pertaining to debt management inside their respective firms. As the regulatory body, the CMA should create appropriate debt management guidelines for the listed commercial and service companies.

This paper examines the impact of monetary policy on corporate investment efficiency from the perspective of debt maturity structure by selecting data on Chinese non-financial listed firms and Chinese macroeconomic data from 2007–2022. The results find that loose monetary policy can have a dual effect on corporate investment efficiency by extending corporate debt maturity structure, which is manifested in alleviating corporate under-investment and promoting corporate over-investment. Heterogeneity analysis shows that in high bank competition areas, the debt maturity structure effect of monetary policy is effective in mitigating under-investment and promoting over-investment by enterprises. In contrast, in low bank competition regions, the debt maturity structure effect of monetary policy promotes corporate over-investment but has no significant effect on corporate under-investment. In addition, the debt maturity structure effect of monetary policy can effectively alleviate under-investment and promote over-investment of enterprises with low financing constraints. And it has no significant effect on the under-investment and over-investment behavior of high financing constraint enterprises. The research in this paper reveals the specific mechanism of monetary policy affecting the investment efficiency of enterprises, which has certain reference value for the objective evaluation of monetary policy effects.

This study examines the impact of board characteristics on capital structure decisions in the context of a transition economy, focusing on Algeria, where governance institutions are underdeveloped and the financial market remains immature. Using the Generalized Method of Moments (GMM) on a panel dataset of 120 firms over the period 2015 to 2019, we identify a U-shaped relationship between board size and leverage, and an inverted U-shaped relationship between board size and debt maturity. Furthermore, increased nationality diversity on boards is found to significantly reduce debt maturity. These findings highlight the critical role of board composition in shaping corporate financing strategies in transition economies and provide novel insights into corporate governance dynamics in a relatively underexplored institutional context. The results are particularly relevant for national entities such as COSOB and Hawkama El Djazaïr and may guide banking sector practices by promoting the integration of board governance criteria into credit evaluation processes.

ABSTRACT This paper develops a dynamic stochastic general equilibrium (DSGE) model to examine the macroeconomic effects of debt-financed fiscal stimulus under the nexus between housing prices, government debt, and financial stability. The results reveal the policy trade-offs between economic growth and risks of debt and financial instability. Debt-financed fiscal stimulus boosts short-term consumption and housing prices; however, it simultaneously crowds out investment and increases long-term debt risk and financial vulnerability. The extension of debt maturity significantly alleviates the government’s repayment pressure and debt risk, although it may result in greater capital losses and tighter balance sheet constraints for financial intermediaries. Moreover, fiscal stimulus coupled with forward guidance in monetary policy can promote firm investment; however, it potentially generates adverse effects on financial intermediaries.

ABSTRACTThe research investigates the causal effects of financial distress on corporate production within the oil industry framework. The identification strategy capitalises on the exogenous shock from the 2014 oil price collapse and pre‐existing firm‐level variations in debt maturity structures. Employing a difference‐in‐difference methodology, the study reveals that firms facing greater rollover risk in 2014 significantly expanded production in the post‐crisis period. This effect is particularly pronounced among firms with lower cash reserves, higher capital intensity, and increased levels of secured debt. The findings offer policy insights into the dramatic declines in commodity prices witnessed during the oil crisis and its subsequent impact.