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Crash risk and debt maturity: evidence from Australia

Crash risk and debt maturity: evidence from Australia The purpose of this paper is to examine the association between debt maturity structure and stock price crash risk in Australia.Design/methodology/approachThe authors employ panel data estimation with industry and year fixed effects. The paper uses a sample of 1,548 publicly listed Australian firms (8,661 firm-year observations) covering the 2000–2015 period.FindingsStock price crash risk is positively and significantly associated with the long-term debt maturity structure of firms. In addition, this positive association is more pronounced for firms with a more opaque information environment.Originality/valueThis is the first study to examine stock price crash risk in Australia. The findings are value relevant as it uncovers how debt maturity structure affects shareholders' wealth protection. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Managerial Finance Emerald Publishing

Crash risk and debt maturity: evidence from Australia

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1743-9132
DOI
10.1108/ijmf-12-2019-0467
Publisher site
See Article on Publisher Site

Abstract

The purpose of this paper is to examine the association between debt maturity structure and stock price crash risk in Australia.Design/methodology/approachThe authors employ panel data estimation with industry and year fixed effects. The paper uses a sample of 1,548 publicly listed Australian firms (8,661 firm-year observations) covering the 2000–2015 period.FindingsStock price crash risk is positively and significantly associated with the long-term debt maturity structure of firms. In addition, this positive association is more pronounced for firms with a more opaque information environment.Originality/valueThis is the first study to examine stock price crash risk in Australia. The findings are value relevant as it uncovers how debt maturity structure affects shareholders' wealth protection.

Journal

International Journal of Managerial FinanceEmerald Publishing

Published: Apr 29, 2021

Keywords: Earnings management; Idiosyncratic volatility; Debt maturity; Accounting conservatism; Stock price crash risk

References