Corporate governance attributes and listed SMES’ debt maturity

Abstract

Purpose This paper aims to develop a cross-country analysis of the similarities and differences in the debt maturity structure of listed SMEs from the point of view of corporate governance (CG) attributes in two different economic environments: an OECD (Spain) country and a non-OECD (Argentina) country. Design/methodology/approach Using data from listed SMEs in the Argentinian SME segment (pooled data from 2012 to 2015) and 31 listed SMEs in the Spanish Mercado Alternativo Bursátil for growing firms (MAB_GE)(2014), bivariate and multivariate analyses are performed. Findings Spanish firms with a higher ownership concentration and a large controlling shareholder have higher short-term liabilities (STL) ratios. Participation of women on the board has a negative relation with the STL ratio only for Spain. The participation of corporations in ownership and a Big4 auditor have a negative relation with the STL ratio for both countries. Practical implications These results will help SME managers understand the effects of the application of good governance policies. The study also gives regulators a guideline to develop standards to assist in efficient borrowing in terms of seeking funding in alternative capital markets. Originality/value First, the results provide evidence about the financial impact on the STL ratio of CG attributes in listed SME. Second, as far as the authors know, this is the first paper to analyse the CG attributes of listed SMEs in an OECD country and a non-OECD country. Third, the paper presents CG data derived from an ad hoc basis elaborated from different websites and databases.

Bibliometric analysis on corporate governance topics published in the journal ofCorporate Governance: The International Journal of Business in Society

“…The listed companies were considered as the major sample in the corporate governance studies with a representation of 4.53% (Briozzo et al , 2019; Githaiga and Kosgei, 2022; Liu, 2016; Merendino and Melville, 2019; Mgammal et al , 2018; Hassan et al , 2019; Sewpersadh, 2019), while Islamic banks consisted of 3.12% of the total topics (Aslam and Haron, 2020, 2021b; Nawaz, 2017; Reyad et al , 2022; Basiruddin and Ahmed, 2020; Khalil and ben Slimene, 2021).…”

“…This will help companies improve their corporate governance, mitigate agency costs and prevent the negative impacts of agency costs on their financial performance. Corporate governance in small and medium enterprise (SMEs) : SMEs play a significant role in different economies as well as in the creation of jobs and economic development. The study by Briozzo et al (2019) is the only one to analyze corporate governance attributes and their impact on debt maturity in Argentina and Spain. Corporate governance attributes include ownership concentration, blockholder ownership, board diversity and a Big4 auditor.…”

The effect of borrower country financial system and corporate governance system types on the spread of syndicated loans

“…Moreover, ownership structure and corporate governance mechanisms are important to explain risk-taking in R&D investments (AIHares, 2020). Briozzo et al (2019) also provide evidence that corporate governance matters to explain debt maturity. Rossi et al (2018) also highlight the importance of the relationship between financial decisions and ownership structure to control and monitor agency costs.…”

Labor lawsuits and debt maturity

“…Because corporate responsibility signals good governance (McGuire et al, 1988), investors can actually perceive responsible firms as less risky (Feldman et al, 1997). In fact, debt maturity and the choice of debt are related to governance (Rossi and Cebula, 2016;Beavers, 2018;Briozzo et al, 2019). Investors can even eliminate socially irresponsible firms from their holdings (Hong and Kacperczyk, 2009).…”