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Ultimate Controlling Shareholder, Cash Flow Right, Debt Maturity Structure
Using a balanced panel data of 915 Chinese listed firms, this paper studies the effect of ultimate controlling shareholders on debt maturity structure by adopting random effect model. Our results show: the larger the ultimate controlling shareholders cash flow rights, the higher the cost of expropriating outside investors by ultimate controlling shareholder, and can reduce the agency costs of debt financing, so banks are willing to provide more long term debt funds for the firms. Ultimate controlling shareholders cash flow rights are positively related to debt maturity structure. The larger the divergence between ultimate controlling shareholders control rights and cash flow rights, the more likely of ultimate controlling shareholder to expropriate outside investors, and this increase the agency conflicts between firms and creditor, which leading to higher agency costs of debt financing, so banks tend to provide more short term funds for firms to constrain the ultimate controlling shareholder. The divergence between ultimate controlling shareholders controlling rights and cash flow rights are negatively related to debt maturity structure.