Long- vs. Short Term Orientation and Refinancing Risk of Public Debt – Evidence form EU Economies

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.