Investigating the Effect of Firm Level Factors on Debt Maturity Structure

Abstract

There are various factors which have the relationship with debt maturity structure in the firm level that several theories have applied to present these factors. Therefore, in this research, the variables of profitability, dividend policy, business risk and taxation as affecting factors on debt maturity structure have been examined under two theories of signaling and tax. In order to do that, four hypotheses have been presented. The statistical population of the research is comprised of listed companies in Tehran Stock Exchange and the research period is the years during 2001 to 2009. Employed statistical model, is multi variable regression and for data analysis, panel data has been used. The results of research hypotheses examination in the level of whole sample represent that there are positive relationship between dividend policy and profitability with debt maturity structure. On the other hand, there is negative relationship between taxation rate with debt maturity structure. Furthermore, there is no significant relationship between business risk with maturity debt structure. The findings are consistent with tax hypothesis, while is not consistent with signaling hypothesis. There are also various correlation results in different industries.

Keywords

• Debt Maturity Structure; Profitability; Dividend Policy; Business Risk