Summary Statistics

Table 4.1 reports the summary statistics for the institutional, macroeconomic and firm-specific variables. The first two variables are the maturity index of Fan et al. (2012) and the weighted- average debt maturity (Ave-debt-maturity) index. Our first maturity index (first column) is a proportional measure and indicates the ratio of long term to total debt. We observe that 52% of the debt of an average firm is long term. The Ave-debt-maturity in the second row displays maturity in number of years. This maturity index has a mean of 3.01. However, this index is based on only about one-half of the observations used for the long-term debt ratio index. The mean strength of creditor rights of 1.86 is below the midpoint of its range between 0 and 4. The average efficiency of the legal system at 75.71 far exceeds the median of the 0 (lowest) to 100 (highest) range for this variable and therefore an average country in our sample enjoys a moderate to high level of efficiency. Median corruption at 4 indicates that the typical country exceeds the median of the 0 (lowest) to 6 (highest) scale for this measure. The average rates of inflation and GDP growth are 2.16 and 2.86 percent, respectively. The mean for public registries indicates that on average 6.56 percent of the population are monitored by public institutions whereas the private bureau coverage

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is much higher at 63.86 percent. The number of private registries per capita also exhibits substantial variability with a standard deviation of 29.23%.

[Please place Table 4.1 about here]

With regard to the firm-specific variables, the market to book ratio has a mean of 1.02 (median of 0.63) and a standard deviation of 3.15. Thus, market value is slightly above (substantially below) one for an average (typical) firm in our sample. The mean and median profitability ratios are 6 and 8 percent, respectively. Tangibility ranges from 2 to 100% with a mean and median of 32% and

27%, respectively. Cash flow volatility is generally low even at the 95th _{percentile where it is 19}

percent. Finally, the book leverage ratio for an average and typical firm tend to be low at 24% and

22%, respectively, although they reach 85% at the 95th _percentile.

Table 4.2 reports the number of firms and firm-year observations for each country in our sample, and the percentage of firms in each country as a fraction of the total number of firms in the sample. The sample has 17,516 firms and 206,575 firm-year observations across the 42 countries over the 15 years examined herein. Since U.S. firms account for 22.72% of the firm-year observations, we later present our results with and without the U.S. firms. After the U.S. in terms of number of observations, we find Japan, China and U.K. Only firms from the U.S. and Japan account for more than 7.74% of the firm-year observations in our sample. Furthermore, 73% of the countries have a firm-year weight of less than 1% in our sample.

[Please place Table 4.2 about here]

Table 4.3 presents the correlations between the main variables. The first and second columns document the negative correlations between creditor rights and both measures of debt maturity, and the positive correlations between these maturity measures and the efficiency of contract enforcement. The correlation of 0.35 between the two measures of maturity suggests that it is high enough to infer that both variables refer to the same underlying variable but low enough to indicate that they are somewhat different measures. A determinant of contract enforcement and property rights, corruption, has a zero correlation with creditor rights, corroborating the former observation of independence between our measures of credit rights and contract enforcement. Consistent with the predictions of our model, corruption is positively related to both measures of maturity. The debt-maturity indexes are positively and significantly correlated with per capita GDP but not

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significantly correlated with inflation. The debt-maturity indexes are positively correlated with firm leverage, tangible assets and firm profitability, which is consistent with the findings of Barclays and Smith (1995) and Ozkan (2000, 2002).

[Please place Table 4.3 about here]

Figure 17 depicts the relative positions of the various countries according to their time-series mean corporate debt maturities. To plot this graph, we first take the means of the maturity index over time and across all firms in any given country and then sort countries based on their average maturities. We observe that the mean ratios of long-term to total liabilities tend to be higher for the more advanced economies. The United States has the largest debt maturity based on this measure, followed by Norway, New Zealand, and Ireland. In contrast, Zimbabwe has the lowest index for this measure with a ratio of 0.1, followed by China, Morocco and Thailand. In the middle maturity range, we find Portugal, Brazil, Croatia and Spain with index values near 0.6.

[Please place Figure 4.1 about here]

As depicted in Figure 18, the distinction between a country’s level of development and debt maturity is not as evident in the Ave-debt-maturity index. Mexico, Japan, and Chile now join the U.S. as the four countries with the longest weighted-average maturities. The four countries at the bottom of the list still include Morocco but now also include India, Sweden and Finland. Sweden in these two graphs shows a remarkable behaviour where it has one of the largest ratios of long term to total debt, while its average debt maturity in years is one of the lowest. In the middle range, we find both developed and developing countries. To illustrate, 14 countries have an Ave-debt- maturity index of 1.5 years. The countries are Croatia, Zimbabwe, China, Greece, Poland, Argentina, Germany, France, Switzerland, Kenya, Australia, New Zealand, Belgium and Hungary.

[Please place Figure 4.2 about here]

Figure 19 plots the level of the creditor-rights index for the various countries. Similar to Figure 17, the different regions and levels of economic development are scattered in the graph. The four countries of the United Kingdom, New Zealand, Kenya and Zimbabwe with the highest creditor protections are either highly advanced or largely underdeveloped. This is also the case for the four bottom countries of France, Columbia, Peru and Mexico.

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[Please place Figure 4.3 about here]