Is Short-Term Debt a Substitute or a Complement to Good Governance?

Is Short-Term Debt a Substitute or a Complement to Good Governance?

Short-term debt exposes firms to credit supply shocks and liquidity risk. Short-term debt can also reduce potential agency conflicts between managers and shareholders by exposing managers to more frequent monitoring by the market. This paper examin...

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Bibliographic Details
Main Authors: Anginer, Deniz, Demirguc-Kunt, Asli, Tepe, Mete, Simsir, Serif Aziz
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2019
Subjects:
CORPORATE GOVERNANCE
BOARD INDEPENDENCE
SHORT-TERM DEBT
INVESTOR PROTECTION
LEGAL ORIGIN
AGENCY ISSUE
SHAREHOLDER PROTECTION
Online Access:http://documents.worldbank.org/curated/en/700321569414144805/Is-Short-Term-Debt-a-Substitute-or-a-Complement-to-Good-Governance
http://hdl.handle.net/10986/32451
id okr-10986-32451
recordtype oai_dc
spelling okr-10986-324512022-09-19T12:17:09Z Is Short-Term Debt a Substitute or a Complement to Good Governance? Anginer, Deniz Demirguc-Kunt, Asli Tepe, Mete Simsir, Serif Aziz CORPORATE GOVERNANCE BOARD INDEPENDENCE SHORT-TERM DEBT INVESTOR PROTECTION LEGAL ORIGIN AGENCY ISSUE SHAREHOLDER PROTECTION Short-term debt exposes firms to credit supply shocks and liquidity risk. Short-term debt can also reduce potential agency conflicts between managers and shareholders by exposing managers to more frequent monitoring by the market. This paper examines whether internal monitoring through independent boards and stronger shareholder protections can substitute for external monitoring through the use of short-term debt. The analysis finds that the relationship between debt maturity and governance depends on shareholder rights in a given country. In countries with stronger investor protection, governance and short-term debt act as substitutes. Instrumenting the institutional environment with legal origin confirms the results. 2019-09-26T15:14:55Z 2019-09-26T15:14:55Z 2019-09 Working Paper http://documents.worldbank.org/curated/en/700321569414144805/Is-Short-Term-Debt-a-Substitute-or-a-Complement-to-Good-Governance http://hdl.handle.net/10986/32451 English Policy Research Working Paper;No. 9022 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Europe and Central Asia
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic CORPORATE GOVERNANCE
BOARD INDEPENDENCE
SHORT-TERM DEBT
INVESTOR PROTECTION
LEGAL ORIGIN
AGENCY ISSUE
SHAREHOLDER PROTECTION
spellingShingle CORPORATE GOVERNANCE
BOARD INDEPENDENCE
SHORT-TERM DEBT
INVESTOR PROTECTION
LEGAL ORIGIN
AGENCY ISSUE
SHAREHOLDER PROTECTION
Anginer, Deniz
Demirguc-Kunt, Asli
Tepe, Mete
Simsir, Serif Aziz
Is Short-Term Debt a Substitute or a Complement to Good Governance?
geographic_facet Europe and Central Asia
relation Policy Research Working Paper;No. 9022
description Short-term debt exposes firms to credit supply shocks and liquidity risk. Short-term debt can also reduce potential agency conflicts between managers and shareholders by exposing managers to more frequent monitoring by the market. This paper examines whether internal monitoring through independent boards and stronger shareholder protections can substitute for external monitoring through the use of short-term debt. The analysis finds that the relationship between debt maturity and governance depends on shareholder rights in a given country. In countries with stronger investor protection, governance and short-term debt act as substitutes. Instrumenting the institutional environment with legal origin confirms the results.
format Working Paper
author Anginer, Deniz
Demirguc-Kunt, Asli
Tepe, Mete
Simsir, Serif Aziz
author_facet Anginer, Deniz
Demirguc-Kunt, Asli
Tepe, Mete
Simsir, Serif Aziz
author_sort Anginer, Deniz
title Is Short-Term Debt a Substitute or a Complement to Good Governance?
title_short Is Short-Term Debt a Substitute or a Complement to Good Governance?
title_full Is Short-Term Debt a Substitute or a Complement to Good Governance?
title_fullStr Is Short-Term Debt a Substitute or a Complement to Good Governance?
title_full_unstemmed Is Short-Term Debt a Substitute or a Complement to Good Governance?
title_sort is short-term debt a substitute or a complement to good governance?
publisher World Bank, Washington, DC
publishDate 2019
url http://documents.worldbank.org/curated/en/700321569414144805/Is-Short-Term-Debt-a-Substitute-or-a-Complement-to-Good-Governance
http://hdl.handle.net/10986/32451
_version_ 1764476573598089216

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