Managerial Entrenchment and Debt Maturity : Theory and Evidence ∗

@inproceedings{Benmelech2006ManagerialEA,
  title={Managerial Entrenchment and Debt Maturity : Theory and Evidence ∗},
  author={Efraim Benmelech and Douglas Baird and George Baker and Patrick F. Bolton and Lauren Cohen and Doug Diamond and Oliver Hart and Steve Kaplan and Toby Moskowitz and R. Edbert Rajan and Jeremy Stein and Luigi Zingales},
  year={2006}
}
Debt maturity theories have emphasized the role of short-term debt in reducing the agency problem between managers and shareholders. In this paper I argue that the maturity structure choice itself is driven by the same agency problem. I develop a model that endogenizes debt maturity choice by self-interested managers given their private benefits of control… CONTINUE READING