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Debt ownership structure and legal system: an international analysis

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This paper is concerned with the ownership structure of corporate debt from an institutional perspective. An attempt is made 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. The results show that bank debt depends both on factors specific to each company and on institutional features of each country. More exactly, it is found that bank loans are related to firm size, to the quality and risk of the projects, and to the collateral. It is also found that a number of legal-institutional factors are impacting on the source of firms' debt, such as creditor protection, firm disclosure requirements and law enforcement.

Document Type: Research Article


Affiliations: Department of Economics and Business Administration University of Valladolid Avda. Valle del Esgueva 6 47011 Valladolid Spain, Email:

Publication date: February 1, 2005

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