The analysis of the impacts on the scale of investment by debt maturity structure—evidence from Chinese publicly listed firms

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The analysis of the impacts on the scale of investment by debt maturity structure-evidence from Chinese publicly listed firms

Abstract: Debt maturity structures are regarded as one of important aspects within the theory of corporate financing, and different debt maturity structures have remarkable influence on the investment decisions. As the largest emerging and transition economy all over the world, debt maturity structure in Chinese listed become more and more attractive to investigate. In this paper, a total of 513 Chinese manufactory firms publicly listed on the A shares of main boards which includes the Shenzhen and Shanghai stock exchanges in 2010 are selected as the study sample. This paper focuses on investigating the impacts of debt maturity structure on the behaviours of investment of Chinese publicly listed companies with these samples and make correlation analysis and regression analysis based on the model.

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Empirical findings represent that there are obvious impacts of debt maturity structure on investment behaviours in publicly listed firms in China; short-term debt is significantly negatively correlated with the behaviours of investment, while long-term debt have substantial correlation with investment behaviours of publicly listed firms.

Keywords : debt financing, debt maturity structure, investment behaviours

Introduction

Debt financing and corporate investments are regarded as two basic financial business activities, which are closely associated with each other. Most discussion focused on debt financing are likely to refer to decisions-making of investments within corporations, and the study of firms' investment behaviours are likely to pay attention to debt financing perspectives (Dang, 2011).

Although the topic of influence of debt on investment behaviours of corporations becomes more and more popular for researchers to study, most researchers are inclined to investigate relationship between...