The Corporate Debt Maturity And Stock Price Crash Risk: Evidence In Vietnam (Hose)

Abstract

There are not many research articles and empirical evidence on the correlation between short-term debt maturity and stock price crash risk. My study uses a data sample of 4,915 firm-year observations of 351 companies listed on the Ho Chi Minh Stock Exchange (HOSE) in Vietnam between 2010 and 2023. This study is a demonstration of the correlation between short-term debt maturity and stock price crash risk. It means that companies with higher short-term debt will be less likely to have a sudden drop in their stock price. Moreover, my study also provides evidence that the negative correlation between short-term debt maturity and future crash risk is stronger for companies with greater levels of risk-taking and lower levels of corporate governance. According to my study results, short-term debt can replace other monitoring systems in preventing management opportunism and lowering the probability of future stock price collapses