Quotation Choi, Jaewon, Hackbarth, Dirk, Zechner, Josef. 2021. Granularity of Corporate Debt (Winner of the 2021 JFQA Sharp Award). Journal of Financial and Quantitative Analysis (JFQA). 56 (4), 1127-1162.




We study whether firms spread out debt maturity dates, which we call "granularity of corporate debt.'' In our model, firms that are unable to roll over expiring debt need to liquidate assets. If multiple small asset sales are less inefficient than a single large one, it can be optimal to diversify debt rollovers across time. Using a large sample of corporate bond issuers during the 1991-2012 period, we establish novel stylized facts and evidence consistent with our model's predictions. There is substantial heterogeneity, i.e., firms have both concentrated and dispersed debt structures. Debt maturities are more dispersed for larger and more mature firms, for firms with better investment opportunities, with higher leverage, and with lower profitability. During the recent financial crisis firms with valuable investment opportunities implemented more dispersed maturity structures. Finally, firms manage granularity actively and adjust toward target levels.


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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Financial and Quantitative Analysis (JFQA)
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-A, VW-A, WH-A
Language English
Title Granularity of Corporate Debt (Winner of the 2021 JFQA Sharp Award)
Volume 56
Number 4
Year 2021
Page from 1127
Page to 1162
Reviewed? Y
URL https://www.cambridge.org/core/journals/journal-of-financial-and-quantitative-analysis/article/granularity-of-corporate-debt/23966F652E4812B9D02D8D6737B5DCB8
DOI https://doi.org/10.1017/S0022109020000149
Open Access N
JEL G13, G31, G32, G33


Zechner, Josef (Details)
Choi, Jaewon (University of Illinois at Urbana-Champaign, United States/USA)
Hackbarth, Dirk (Boston University, United States/USA)
Institute for Finance, Banking and Insurance IN (Details)
Research Institute for Capital Markets FI (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5305 Bank management (Details)
5307 Business and management economics (Details)
5358 Corporate finances (Details)
5361 Financial management (Details)
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