Abstract
This article investigates the gap-filling explanation for corporate debt maturity choices in a multi-country setting. We argue that companies adjust their debt maturity in response to shocks in government debt maturity both at home and abroad; the difference between the two effects depends on the markets’ relative size and level of integration. Focusing on the European case and treating the Economic and Monetary Union as a shock in market integration, we find strong empirical support for our predictions. Our results have relevant implications for the opportunity for individual governments to use their debt maturity structure as a policy tool.
Original language | English |
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Pages (from-to) | 2119-2140 |
Journal | Journal of Financial and Quantitative Analysis (JFQA) |
Volume | 54 |
Issue number | 5 |
DOIs | |
Publication status | Published - Oct 2019 |