Abstract
This paper studies the impact of bank monitoring on the maturity structure of corporate debt issues using Korean firms listed on Korea Exchange from 2005 to 2011. We show that a higher proportion of bank debt in the small and medium enterprises results in corporate debt of longer maturity. The close relationship between banks and SMEs creates information and alleviates information asymmetry problem of borrowing firms. However, banks less perform monitoring and screening as information creator in the relationship with big firms. Because big firms have information asymmetry less than SMEs, and they suffer less problems from information asymmetry when contracting debt. The Probit regression shows that the Bank-Firm relationship increases possibility of issuing corporate debt of longer maturity in SMEs, and it supports the results of regressions above.
Keywords
Citation
Song, H. and Kim, B.J. (2016), "Bank Loans and Maturity of Corporate Bond Issues", Journal of Derivatives and Quantitative Studies: 선물연구, Vol. 24 No. 2, pp. 221-244. https://doi.org/10.1108/JDQS-02-2016-B0002
Publisher
:Emerald Publishing Limited
Copyright © 2016 Emerald Publishing Limited
License
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