IDEAS home Printed from https://ideas.repec.org/p/bku/doctra/2018006.html
   My bibliography  Save this paper

Determinants of Leverage Maturity Structure of Uruguayan Non-financial Firms

Author

Listed:
  • Miguel Mello Costa

    (Banco Central del Uruguay)

Abstract

The purpose of this paper is to study the decision of Uruguayan non-financial firms regarding the temporal dimension of the financing structure, this is, to characterize the temporal structure of Uruguayan nonfinancial firm’s leverage. The paper mainly, analyze the interaction of long-term financial leverage with the other type of external financing of the firm and with the use of own capital. I used a unique panel database that is a merge of the Annual Economic Activity Survey and the Credit Risk Center managed by the Central Bank of Uruguay. The sample covers the period 2011-2014, for this period there is complete balance sheet information. The different external financing options for the firms are complementary to the long-term leverage. In turn, the use of the firm’s own capital is a substitute for long-term leverage. On the side of the demand for long-term credit, firms with higher profitability prefer to finance themselves with their own capital and those with lower profitability turn to external financing to the firm.

Suggested Citation

  • Miguel Mello Costa, 2018. "Determinants of Leverage Maturity Structure of Uruguayan Non-financial Firms," Documentos de trabajo 2018006, Banco Central del Uruguay.
    • Handle: RePEc:bku:doctra:2018006
    as

    Download full text from publisher

    File URL: https://www.bcu.gub.uy/Estadisticas-e-Indicadores/Documentos%20de%20Trabajo/6.2018.pdf
    File Function: First version, 2018
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sheridan Titman & Sergey Tsyplakov, 2007. "A Dynamic Model of Optimal Capital Structure," Review of Finance, European Finance Association, vol. 11(3), pages 401-451.
    2. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    3. Stulz, ReneM. & Johnson, Herb, 1985. "An analysis of secured debt," Journal of Financial Economics, Elsevier, vol. 14(4), pages 501-521, December.
    4. Flannery, Mark J, 1986. "Asymmetric Information and Risky Debt Maturity Choice," Journal of Finance, American Finance Association, vol. 41(1), pages 19-37, March.
    5. Fama, Eugene F, 1978. "The Effects of a Firm's Investment and Financing Decisions on the Welfare of Its Security Holders," American Economic Review, American Economic Association, vol. 68(3), pages 272-284, June.
    6. Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
    7. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
    8. Blackwell, David W. & Kidwell, David S., 1988. "An investigation of cost differences between public sales and private placements of debt," Journal of Financial Economics, Elsevier, vol. 22(2), pages 253-278, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Miguel Mello Costa, 2018. "An Empirical Analysis of the Maturity of Debt Supply in Uruguay," Documentos de trabajo 2018005, Banco Central del Uruguay.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Miguel Mello Costa, 2018. "An Empirical Analysis of the Maturity of Debt Supply in Uruguay," Documentos de trabajo 2018005, Banco Central del Uruguay.
    2. Goyal, Vidhan K. & Lehn, Kenneth & Racic, Stanko, 2002. "Growth opportunities and corporate debt policy: the case of the U.S. defense industry," Journal of Financial Economics, Elsevier, vol. 64(1), pages 35-59, April.
    3. Gao, Ning & Jiang, Wei & Jin, Jiaxu, 2023. "Disproportional control rights and debt maturity," International Review of Financial Analysis, Elsevier, vol. 85(C).
    4. Kim, Sang-Joon & Bae, John & Oh, Hannah, 2019. "Financing strategically: The moderation effect of marketing activities on the bifurcated relationship between debt level and firm valuation of small and medium enterprises," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 663-681.
    5. Berger, Allen N. & Espinosa-Vega, Marco A. & Frame, W. Scott & Miller, Nathan H., 2011. "Why do borrowers pledge collateral? New empirical evidence on the role of asymmetric information," Journal of Financial Intermediation, Elsevier, vol. 20(1), pages 55-70, January.
    6. Saiying Deng & Vincent J. Intintoli & Andrew Zhang, 2019. "CEO Turnover, Information Uncertainty, and Debt Contracting," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 9(02), pages 1-54, June.
    7. repec:hal:spmain:info:hdl:2441/293qice3lj861rvos9ns14n0h0 is not listed on IDEAS
    8. Gregory S. Crawford & Nicola Pavanini & Fabiano Schivardi, 2018. "Asymmetric Information and Imperfect Competition in Lending Markets," American Economic Review, American Economic Association, vol. 108(7), pages 1659-1701, July.
    9. Erel, Isil & Julio, Brandon & Kim, Woojin & Weisbach, Michael S., 2009. "Market Conditions and the Structure of Securities," Working Paper Series 2009-6, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
    10. Gabriel J. Power & Djerry C. Mbianda Tandja, 2022. "Should lenders also advise? Evidence from project loans," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 45(4), pages 961-985, December.
    11. Miller, Darius P. & Puthenpurackal, John J., 2002. "The Costs, Wealth Effects, and Determinants of International Capital Raising: Evidence from Public Yankee Bonds," Journal of Financial Intermediation, Elsevier, vol. 11(4), pages 455-485, October.
    12. Isil Erel & Brandon Julio & Woojin Kim & Michael S. Weisbach, 2012. "Macroeconomic Conditions and Capital Raising," The Review of Financial Studies, Society for Financial Studies, vol. 25(2), pages 341-376.
    13. Yongheng Deng & Maggie (Rong) Hu & Anand Srinivasan, 2017. "Information Asymmetry and Organizational Structure: Evidence from REITs," The Journal of Real Estate Finance and Economics, Springer, vol. 55(1), pages 32-64, July.
    14. Chodorow-Reich, Gabriel & Darmouni, Olivier & Luck, Stephan & Plosser, Matthew, 2022. "Bank liquidity provision across the firm size distribution," Journal of Financial Economics, Elsevier, vol. 144(3), pages 908-932.
    15. César Camisón & José Antonio Clemente & Sergio Camisón-Haba, 2022. "Asset tangibility, information asymmetries and intangibles as determinants of family firms leverage," Review of Managerial Science, Springer, vol. 16(7), pages 2047-2082, October.
    16. Chang Nam & Doina Radulescu, 2010. "Effects of corporate tax reform on optimum debt maturity," Annals of Finance, Springer, vol. 6(3), pages 369-389, July.
    17. Jamie Alcock & Frank Finn & Kelvin Jui Keng Tan, 2012. "The determinants of debt maturity in Australian firms," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 52(2), pages 313-341, June.
    18. Adrian Van Rixtel & Luna Romo González & Jing Yang, 2015. "The determinants of long-term debt issuance by European banks: evidence of two crises," BIS Working Papers 513, Bank for International Settlements.
    19. Kirschenmann, K., 2010. "The Dynamics in Requested and Granted Loan Terms when Bank and Borrower Interact Repeatedly," Other publications TiSEM 300df022-4701-4773-a8b7-c, Tilburg University, School of Economics and Management.
    20. Hartmann-Wendels, Thomas & Winter, Jens, 2006. "Leasing und asymmetrische Informationsverteilung," Leasing - Wissenschaft & Praxis, Universität zu Köln, Forschungsinstitut für Leasing, vol. 4(1), pages 15-27.
    21. Marcello Pagnini & Paola Rossi & Valerio Vacca & Lucia dalla Pellegrina & Serena Frazzoni & Zeno Rotondi & Andrea Vezzulli, 2017. "Access to Credit for Small Innovative Businesses," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 46(3), pages 411-458, November.

    More about this item

    Keywords

    Financial structure; leverage; indebtedness; panel data; corporate finance;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bku:doctra:2018006. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Biblioteca Especializada (email available below). General contact details of provider: https://edirc.repec.org/data/bcugvuy.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.