Debt Maturity and SMEs: Do Auditor's Quality and Ownership Structure Matter?

Abstract

This study analyzes the two corporate governance mechanisms that affect the debt maturity structure of small and mediumsized enterprises (SMEs) listed on the Alternative Investment Market (AIM): Big 4 auditors and the firms’ ownership structure. Analyzing 227 listed SMEs (1998–2016) and applying both crosssectional and panel data estimations, we find that: (a) there is a positive and significant relationship between Big 4 auditors and debt maturity; (b) firms with more ownership concentration have a higher fraction of long-term debt in their capital structure; (c) although family firms are, on average, associated with shorter debt maturities, when they are audited by a Big 4, their debt maturity lengthens.