Debt maturity structure of private lodging firms

This study tests the signalling and liquidity risk hypotheses about the choice of debt maturity structure in the context of private lodging firms. We find a positive and significant relationship between the Z-score (as a proxy for firm quality) and the proportion of short-term debt. This finding sup...

Full description

Saved in:
Bibliographic Details
Published in:Applied economics letters 2022-05, Vol.29 (8), p.706-712
Main Authors: Choi, Young Mok, Park, Kunsu
Format: Article
Language:English
Subjects:
Companies
Debt maturity structure
Economic analysis
Economic theory
Economics
Hospitality industry
Liquidity
liquidity risk hypothesis
lodging industry
Long term debt
Maturity
private firms
Short term debt
signalling hypothesis
Citations: Items that this one cites
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:This study tests the signalling and liquidity risk hypotheses about the choice of debt maturity structure in the context of private lodging firms. We find a positive and significant relationship between the Z-score (as a proxy for firm quality) and the proportion of short-term debt. This finding supports the signalling hypothesis that low-quality firms prefer to issue long-term debt, while high-quality firms issue short-term debt. However, we find no evidence consistent with the liquidity risk hypothesis. We further find that the most influential factor affecting debt maturity is firm size, followed by Z-scores and then firm age. Our findings are robust to alternative estimation specifications and endogeneity concerns. Overall, our study contributes to expanding our understanding of the debt maturity structure in private firms.
ISSN:1350-4851
1466-4291
DOI:10.1080/13504851.2021.1884830