Long- vs. short term orientation and refinancing risk of public debt – evidence form EU economies

Abstract—The aim of the study is to examine whether countries characterized by long-term orientation (in the context of the Hofstede model) tend to issue public debt with longer maturities compared to countries classified as having a short-term orientation, thereby reducing refinancing risk for public debt. To address this aim, the following research hypotheses were formulated: (1) there is a positive and strong correlation between the level of the long-term orientation index and the maturity length of public debt; (2) the values of the average term to maturity (ATM) are higher in countries with higher levels of the long-term orientation index. The study uses annual data from 2011–2022 collected for the EU member states. Key findings are presented in the section Conclusion and Policy Implications. Keywords—Public debt, Hofstede model, European Union, sovereign debt maturity.