How do industry tournament incentives affect firm debt maturity?

Wanxia Qi, Pornsit Jiraporn, Yixin Liu

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1 Scopus citations

Abstract

Our study investigates the effect of external industry tournament incentives on debt maturity structure. Prior research shows that industry tournament incentives motivate managers to employ more risky strategies. Recognizing this stronger tendency for risk-taking, creditors may shorten debt maturity and subject managers to more frequent scrutiny by debt markets. Consistent with this notion, our results show that stronger industry tournament incentives lead to significantly more short-term debt. This effect is more pronounced in firms with low credit quality, in areas with a high density of firms from the same industry, and in industries with more CEO positions.

Original languageEnglish (US)
Article number102081
JournalResearch in International Business and Finance
Volume67
DOIs
StatePublished - Jan 2024

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting (miscellaneous)
  • Finance

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