Conference Agenda

We reconstruct the debt ownership structure of 10,136 firms in 52 countries over 2002-2021. Contrary to prior literature, debt ownership is most concentrated in civil-law countries and most dispersed in common-law countries. This result is driven by junior arm’s-length debt dispersion. Where investor protection is stronger, dispersed arm’s-length debt coexists with concentrated bank debt. In weaker investor protection environments firms rely more on short-maturity and USD-denominated borrowing. These patterns are most pronounced among small-to-medium firms, whereas the largest exhibit dispersed debt ownership by international investors almost irrespective of country of incorporation. Our results support legal origin and financial contracting theories.