Debt Maturity Choice of Nonpublic Italian Firms

Abstract

This paper focuses on debt maturity of nonpublic Italian firms of small and medium size by international standards and that mainly use bank loans as source of external financing. Compared to few similar studies, the main contributions are that panel estimations allow to control for unobserved firm heterogeneity; firms are also permitted to choose simultaneously leverage and debt maturity. The evidence is that debt maturity is shorter for companies that are riskier and affected by asymmetric information. In areas of the country with poorer legal enforcement, in choosing debt maturity lenders lay greater emphasis on indicators of firm information opacity.