Commercial paper market development and corporate maturity mismatch: evidence from China

This study exploits the establishment of the Shanghai Commercial Paper Exchange (SCPE) as a quasi-natural experiment to investigate the impact of commercial paper market development on corporate maturity mismatch. Using a generalized difference-in-differences design that exploits firms’ pre-SCPE commercial paper holdings, we examine Chinese A-share listed firms from 2011 to 2021 and find that commercial paper market development significantly reduces corporate maturity mismatch. Mechanism analysis indicates that the SCPE enhances the liquidity and acceptability of commercial paper, thereby augmenting firms’ internal funds for investment. Simultaneously, the SCPE generates spillover effects on bank lending by improving firms’ access to long-term credit and reducing their reliance on short-term debt to finance investment. Notably, the mitigating effect on maturity mismatch is particularly pronounced among firms with high financing constraints, rapid growth, intensive R&D activity, strong market competition, and those located in regions with lower levels of financial development. In contrast, for highly internationalized firms, the mitigating effect of commercial paper market development on maturity mismatch is significantly attenuated. Additionally, commercial paper market development enhances corporate performance, as reflected in higher production efficiency and reduced operational risk.