Voluntary disclosure, ownership structure, and corporate debt maturity: a study of French listed firms

This study examines the effect of voluntary disclosure on corporate debt maturity and the role of ownership structure in this effect. For a sample of 440 French listed firms from 2007 to 2013, the empirical results indicate that firms with greater voluntary disclosure have more long-term debt, suggesting that companies benefit from extensive disclosure through greater access to long-maturity debt. This finding is consistent with the evidence that voluntary disclosure provides an efficient monitoring mechanism in firms where long-term debt could insulate firms from lender scrutiny for long periods. The results also show that the positive association between voluntary disclosure and long-term debt is relevant only when the control rights of the controlling shareholders are significantly in excess of cash-flow rights. This finding supports recent work showing that better disclosure policies are viewed more positively by the market in environments where the risk of wealth expropriation by dominant shareholders is higher.