Debt Maturity, Ownership Concentration, and Firm Efficiency

Firm Ownership and Economic Efficiency

JEL: D24, L33

Debt and Firm Vulnerability

Debt introduces firm vulnerability to insolvency as cash flow must be available to make interest payments. This paper reviews the empirical evidence on a sample of more than 6,000 real sector firms in 41 countries and their ability to service debt, as measured by the ratio of cash flow to interest expense, for the period 1994-01. Firmspecific, sector-specific and macroeconomic factors all influ...

Optimal Government Debt Maturity

This paper develops a model of optimal government debt maturity in which the government cannot issue state-contingent bonds and cannot commit to fiscal policy. If the government can perfectly commit, it fully insulates the economy against government spending shocks by purchasing short-term assets and issuing long-term debt. These positions are quantitatively very large relative to GDP and do no...

Corporate Debt Maturity Profiles ∗

We study a novel aspect of a firm’s capital structure, namely the profile of its debt maturity dates. In a simple theoretical framework we show that the dispersion of debt maturities constitutes an important dimension of capital structure choice, driven by firm characteristics and debt rollover risk. Guided by these results we establish two main empirical results. First, using an exogenous shoc...

Ownership of the Firm