The Economic Impact of the COVID-19 Crisis on Debt Maturity and Capital Structure Decisions: Evidence from Swedish Listed Firms

Abstract

This study investigates how Swedish-listed firms adapted their capital structure in response to economic uncertainty caused by the COVID-19 pandemic. Drawing on previous research, we explored and analyzed shifts in firms’ usage of short- and long-term debt before (2018-2020), during (2020-2022), and after the COVID-19 pandemic (2022-2024), to identify potential structural financial adjustments from the crisis. During and after the crisis, our results showed that while both short-term and long-term debt were affected, firms did not consistently prioritize long-term debt, particularly in the crisis period. Instead, firms appeared to focus on maintaining financial flexibility, favoring internal financing. The findings aimed to provide a deeper understanding of how firms respond to financial crises and the strategic role of debt maturity. The results gave insights into financial decision-making and the strategic role of debt maturity in uncertain times such as the crisis of COVID-19.