This paper examines an unexplored issue of how a firm's competitive environment, proxied by import penetration, affects its debt maturity structure. We document a significant, positive relationship between foreign product competition and the proportion of short-term debt. Our results are robust to a series of sensitivity tests and endogeneity concerns. Utilising large, unexpected reductions in import tariffs as exogenous shocks to foreign competition, we validate the positive effect of import penetration on short-term debt. Our results hold more strongly for firms with high information asymmetry and weak external monitoring. These findings indicate that lenders offer short-term debt to prospective borrowers when they exhibit higher information asymmetry in response to increased foreign competition. Additional tests reveal that short-term debt in a firm's financial structure, contingent upon foreign competition, encourages managers to engage in tax avoidance as an alternative funding source. Our study provides novel evidence of the consequential impact of foreign product competition in debt contracting, giving us insights into its practical implications for corporate strategies and the ramifications of trade liberalisation for policymakers.

本文研究了一个未探索的问题，即以进口渗透为代表的公司竞争环境如何影响其债务期限结构。我们记录了外国产品竞争与短期债务比例之间显着的正相关关系。我们的结果对一系列敏感性测试和内生性问题是稳健的。利用进口关税的大幅意外降低作为对外国竞争的外生冲击，我们验证了进口渗透对短期债务的积极影响。对于信息高度不对称和外部监督薄弱的公司，我们的结果更为有效。这些发现表明，当贷款人为应对日益激烈的外国竞争而表现出更高的信息不对称时，他们会向潜在借款人提供短期债务。额外的测试表明，公司财务结构中的短期债务取决于外国竞争，鼓励管理人员将避税作为替代资金来源。我们的研究提供了外国产品竞争对债务契约的间接影响的新证据，让我们深入了解其对公司战略的实际影响以及贸易自由化对政策制定者的影响。