Financial System Reform, Earnings Persistence and Debt Maturity

The debt maturity of specific firms has been important to measure efficiency of credit resources allocation, Xue and Zhu (2010) suggest that financial information play different role in short-term and long-term credit market. We focus on the financial system reform in the end of 2003 promoted by Chinese government, investigate the influence of earnings persistence on debt maturity by Chinese listed companies during 2002-2006, find that the firms with lower earnings quality obtain longer debt maturity after the reform, the result show that information relativity has increased significantly, but rent seeking is still important factor affecting the credit resource allocation.