Stock market liberalisation and debt maturity structure: Evidence from the Shanghai-Hong Kong Stock Connect

This study uses a sample of Chinese A-share listed firms between 2012 and 2021 to analyse the effects of the launch of the Shanghai-Hong Kong Stock Connect (SHSC) policy on the debt maturity structure as well as its mechanism. The research illustrates that the implementation of the policy has resulted in a lengthening of the debt maturity structure. In addition, the results of the research indicate that the information environment and corporate governance may serve as potential mechanisms for how stock market liberalisation may influence the length of debt maturity. Moreover, the debt maturity structure significantly lengthens for firms facing greater financing constraints, non-state-owned enterprises (NSOEs), and small-scale firms following the establishment of the SHSC policy. These empirical findings remain robust after several sensitivity tests. Overall, these results show that the SHSC policy has given firms more opportunities for growth, leading to changes in their debt maturity structure and contributing to the healthy and stable development of these firms.