Study On Debt Maturity Structure Of Listed Companies In China

The late 1990s saw the innovation of financial reform within the enterprises in China. The enterprises' right to make decisions on finance has changed qualitatively; the development of securities market provides listed companies multiple choices of financing approaches; the deepening reform of financial system and perfection of Modern Enterprise System make it imperative that the relationship between banks and firms should be market exchange. However, the market-oriented reform takes place in China who has special political economy, and it brings advantages as well as disadvantages to listed companies choosing debt maturity. As the objective of financial reform, selection of debt maturity in listed companies remains an unresolved issue and deserves in-depth thought and research. This dissertation examines systematically the debt maturity structure of listed companies in China by empirical study. The dissertation uses an institutional perspective to examine listed companies' preference for short-term debt and generally shorter debt maturity structure from macroscopic aspect. The analysis reveals that listed companies' preference for shorter debt maturity structure is negatively associated with the efficiency of bankruptcy laws in China and positively associated with the effect of stock market as the substitute for corporate bond market, and therefore short-term debt and equity financing become an alternative approach to long-term debt financing in listed companies. Focusing on the specific firm attributes, the study explores why there are different debt maturity structure for different listed companies under the same system. The result shows that asset attributes, financial strength and agency cost are the determinants of debt maturity for listed companies in China. Finally, the incentives for listed companies to prefer short-term debt and the external limitations of the preference are studied.