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Crash risk and debt maturity: evidence from Australia

Author

Listed:
  • Mostafa Hasan
  • Dewan Rahman
  • Grantley Taylor
  • Barry Oliver

Abstract

Purpose - The purpose of this paper is to examine the association between debt maturity structure and stock price crash risk in Australia. Design/methodology/approach - The authors employ panel data estimation with industry and year fixed effects. The paper uses a sample of 1,548 publicly listed Australian firms (8,661 firm-year observations) covering the 2000–2015 period. Findings - Stock price crash risk is positively and significantly associated with the long-term debt maturity structure of firms. In addition, this positive association is more pronounced for firms with a more opaque information environment. Originality/value - This is the first study to examine stock price crash risk in Australia. The findings are value relevant as it uncovers how debt maturity structure affects shareholders' wealth protection.

Suggested Citation

  • Mostafa Hasan & Dewan Rahman & Grantley Taylor & Barry Oliver, 2020. "Crash risk and debt maturity: evidence from Australia," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 17(3), pages 377-400, July.
    • Handle: RePEc:eme:ijmfpp:ijmf-12-2019-0467
    DOI: 10.1108/IJMF-12-2019-0467
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    Citations

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    Cited by:

    1. Lee, Chien-Chiang & Wang, Chih-Wei & Purnama, Muhammad Yusuf Indra & Sharma, Susan Sunila, 2024. "Digitalization and firms' debt maturity: Do financial constraints and uncertainty matter?," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    2. Zhang, Li & Liu, Chengyi & Zhang, Jinjin & Ke, Jinjun & Yuan, Jiayue, 2023. "Party leadership, corporate governance and stock price crash risk: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 88(C).

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