Debt Maturity, Financing Pressure, and Expansion Motives: State-Dependent Moderating Effects on Capital Structure Adjustment Speed

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Authors: Xiaomeng Zhang, Dongil Kim
Cited by: 0

Abstract

This study adopts a managerial decision-making perspective and employs the Partial Adjustment Model (PAM) to empirically analyze the dynamics of capital structure adjustments among Chinese A-share listed companies from 2015 to 2024. It conceptualizes and examines the asymmetric moderating effects of debt maturity , financing cost pressure , and expansion motivation under distinct leverage states. Findings reveal a pronounced directional asymmetry: overleveraged firms correct their positions 2.0 to 2.6 times faster than underleveraged firms, indicating that risk aversion and regulatory compliance motives outweigh the incentives for leverage accumulation. While expansion motives significantly catalyze rebalancing when firms are underleveraged, financing costs and maturity windows impose restrictive boundaries. Furthermore, by incorporating a COVID-19 dummy and exploring ownership heterogeneities, the study confirms that the structural reform and deleveraging policies in China have fundamentally reshaped corporate financial behavior. These insights offer significant reference value for credit-dependent economies like South Korea in enhancing financial stability and formulating macro-prudential policies.

Fields of Study & Subjects

Corporate Finance and Governance Financial Analysis and Corporate Governance Fiscal Policies and Political Economy

Publication details

Journal / source
Journal of Business Convergence
Volume
11
Issue
1
Pages
313–321
Publication date
28 February 2026
Language
EN