Lensink, Robert; Tra, Pham Thi Thu - In: Applied Financial Economics Letters 2 (2006) 4, pp. 239-241
The theoretical literature on a firm's choice of debt maturity argues that a borrowing firm can signal its value in an asymmetric information setting by borrowing short. This well-known fact is based on Flannery (1986). This note questions the use of debt maturity as a signalling device. It...