The effect of managerial discretion on the maturity structure of corporate public debt: Evidence on publicly-listed firms in the Philippines

• Main Authors: Ang, Jayson, Cornejo, Elmira, Ingusan, Dustin, Salva, Angelo
• Format: text
• Language: English
• Published: Animo Repository 2015
• Subjects: Corporate debt > Philippines; Corporate bonds > Philippines
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/7150
• Institution: De La Salle University

The Philippine corporate debt market is emerging. Continuous inflow of new issuers of bonds that are made available to the public is becoming a regular event. This study explores the relation between managerial discretion and the maturity structure of corporate public debt. Using a sample of corporate bonds issued by the publicly-listed companies in the Philippines over the 2010-2014, the study's results reveal that managerial ownership have ambiguous effects on the maturity of public debt. Firms with higher managerial ownership have higher Tobin's Q. These results indicate that bondholders are concerned about the potential costs from risk taking activities, thereby decreasing the length of maturity for corporate public debt. In addition, firms with higher managerial ownership face higher yield spreads.