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Article
Governance-default risk relationship and the demand for intermediated and non-intermediated debt
Australasian Accounting Business and Finance Journal
  • Husam Aldamen, Qatar University
  • Keith Duncan, Bond University
  • Safdar Ullah Khan, Bond University
Date of this Version
1-1-2012
Document Type
Journal Article
Publication Details

Published version

Aldamen, H., Duncan, K., & Khan, S. (2012). Governance-default risk relationship and the demand for intermediated and non-intermediated debt. Australasian Accounting Business and Finance Journal, 6(3), 25-42. ISSN: 1834-2000

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2012 HERDC submission. FoR code: 150103

© Copyright Australasian Accounting Business and Finance Journal and Authors, 2012

Disciplines
Abstract
This paper explores the impact of corporate governance on the demand for intermediated debt (asset finance, bank debt, non-bank private debt) and non-intermediated debt (public debt) in the Australian debt market. Relative to other countries the Australian debt market is characterised by higher proportions of intermediatedor private debt with a lower inherent level of information asymmetry in that private lenders have greater access to financial information (Gray, Koh & Tong 2009). Our firm level, cross-sectional evidence suggests that higher corporate governance impacts demand for debt via the mitigation of default risk. However, this relationship is not uniform across all debt types. Intermediated debt such as bank and asset finance debt are more responsive to changes in governance-default risk relationship than non-bank and non-intermediated debt. The implication is that a firm’s demand for different debt types will reflect its governance-default risk profile.
Citation Information
Husam Aldamen, Keith Duncan and Safdar Ullah Khan. "Governance-default risk relationship and the demand for intermediated and non-intermediated debt" Australasian Accounting Business and Finance Journal Vol. 6 Iss. 3 (2012) p. 25 - 42 ISSN: 1834-2000
Available at: http://works.bepress.com/safdar_khan/26/