A Research On The Impact Of Debt Maturity Structure On Company Investment In Fixed Assets

The modern western researches on the impact of financing on corporate investment behaviors can be divided into the following two aspects. On the one hand, they study the influence of conflicts between shareholders and creditors on corporate investment behaviors, that is, the interest conflicts between shareholders and creditors lead to insufficient investment and asset substitution problems. They, on the other hand, study the debt governance that liability can reduce the over-investment problems which origin from the interest conflicts of manager and shareholders. The majority of the existing literatures concentrate on the impacts of debt financing on corporate investment, and they consider of the various sources of liabilities as to be homogeneous. As a matter of fact, ceteris paribus, the impact of debt maturity structure, which consists of short-term liabilities and long-term debt, on corporate investment is different.This paper takes the data set of Chinese listed companies, whose core business is manufacturing, as the study window. This data set is composed of the data from 2004 through 2009. Then this research models the expenditure of properties, plant and equipment, and the debt maturity structure, and controls the Lag phase of the investment, sales, Financing constraints, and growth. This paper contributes to the existing literatures on the interaction between debt maturity structure and corporate investments in three directions.First, generally speaking, the interaction between short-term debt and investment in fixed assets is negatively, the interaction between long-term debt and investment in fixed assets is positively. Manufacturing of listed companies with investment in low-risk, the interaction between short-term liabilities and fixed assets investment scale is negatively, and so is the long-term debt, Manufacturing of listed companies with investment in high-risk, the interaction between short-term liabilities and fixed assets investment scale is positively, and so is the long-term debt. There is not so much debt governance of short-term debt as what the western classic literatures implied. Here the short-term debt does not play its role in debt governance.