We provide an empirical examination of the determinants of corporate debt maturity.
Our evidence offers strong support for the contracting-cost hypothesis. Firms that
have few growth options, are large, or are regulated have more long-term debt in
their capital structure. We find little evidence that firms use the maturity structure
of their debt to signal information to the market. The evidence is consistent, however,
with the hypothesis that firms with larger information asymmetries issue more short-term
debt. We find no evidence that taxes affect debt maturity.