Debt Ownership Structure and Legal System: An International Analysis
Applied Economics, Vol. 37, pp. 355-365
19 Pages Posted: 16 Jul 2003 Last revised: 29 Nov 2010
Date Written: May 1, 2003
This paper is concerned with the ownership structure of corporate debt from an institutional perspective. We try to identify the factors affecting bank debt use from an international sample of companies from Austria, Germany, Japan, Belgium, France, Italy, Holland, Spain, Portugal, Finland, Sweden and the USA. Our results show that bank debt depends both on factors specific to each company and on institutional features of each country. More exactly, we find that bank loans are related to firm size, to the quality and risk of the projects, and to the collateral. We also find a number of legal-institutional factors impacting on the source of firms' debt, such as creditor protection, firm disclosure requirements and law enforcement.
Keywords: banks, panel data, capital structure, ownership structure, financial system
JEL Classification: G21, G32
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