Using political corruption conviction data from the US Department of Justice, we examine the
impact of local corruption on firms' debt maturity structure while exploring both demand-side
and supply-side explanations. Our results support the demand-side story and indicate that
firms in high corruption areas utilize less short-term debt to mitigate liquidity and refinancing
risks. Consistent with this, we find the effect is more pronounced among firms with smaller
size, lower asset redeployability, and higher volatility. Our findings remain robust to the …