TY - JOUR
T1 - Labor protection and corporate Debt maturity
T2 - International evidence
AU - Belkhir, Mohamed
AU - Ben-Nasr, Hamdi
AU - Boubaker, Sabri
N1 - Funding Information:
We thank participants at the 2014 Global Finance Conference, the 2014 Financial Management Association Annual Meeting for their insightful comments, and anonymous reviewers as well as the journal editor for their insightful comments and suggestions. Hamdi Ben Nasr would like to extend his sincere appreciation to the Deanship for Scientific Research at King Saud University for its funding of this research through the research group project (RG-1435-039).
Publisher Copyright:
© 2016.
PY - 2016/5/1
Y1 - 2016/5/1
N2 - This paper investigates the impact of labor protection on corporate debt maturity structure. We hypothesize that stronger labor protection is conducive to a greater use of short-term debt maturity by firms. Using various country-level indicators as measures of labor protection, and a sample of 114,594 firm-years from 43 countries over the 1990-2010 period, we document robust evidence that firms located in countries where labor enjoys a strong protection tend to borrow more short-term. Our analysis suggests that labor protection is an important institutional factor that plays a role in determining the maturity structure of corporate debt over-and-above economic, legal, and political factors identified in prior research.
AB - This paper investigates the impact of labor protection on corporate debt maturity structure. We hypothesize that stronger labor protection is conducive to a greater use of short-term debt maturity by firms. Using various country-level indicators as measures of labor protection, and a sample of 114,594 firm-years from 43 countries over the 1990-2010 period, we document robust evidence that firms located in countries where labor enjoys a strong protection tend to borrow more short-term. Our analysis suggests that labor protection is an important institutional factor that plays a role in determining the maturity structure of corporate debt over-and-above economic, legal, and political factors identified in prior research.
KW - Agency theory
KW - Debt maturity
KW - Information asymmetry
KW - Institutions
KW - Labor protection
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U2 - 10.1016/j.irfa.2016.01.012
DO - 10.1016/j.irfa.2016.01.012
M3 - Article
AN - SCOPUS:84961933231
SN - 1057-5219
VL - 45
SP - 134
EP - 149
JO - International Review of Financial Analysis
JF - International Review of Financial Analysis
ER -