July 22, 2026
The European Corporate Governance Institute (ECGI) recently published a blog post featuring research by Dirk Hackbarth (and co-authors Zhiyao Chen, Jarrad Harford and Yuxin Luo) on how corporate rollover risk affects mergers and acquisitions.
The research argues that debt maturity alone is an incomplete measure of a company’s debt refinancing risk. Instead, rollover risk depends jointly on how frequently firms must refinance and the potential losses they face when refinancing debt under unfavorable market conditions.
In a nutshell, the authors find that a one-standard-deviation increase in rollover risk reduces the probability of an acquisition by about 2.5 percentage points and substantially reduces deal size. Firms facing greater corporate debt rollover risk are also less likely to finance acquisitions entirely with cash, preserving financial flexibility ahead of costly refinancing windows.
The findings highlight a “maturity overhang” channel through which refinancing conditions can influence major corporate investment decisions. More broadly, they suggest that managers, investors, and policymakers should evaluate debt maturity together with prevailing credit-market conditions when assessing firms’ investment and financing choices.
