Corporate Debt Structure Around the World
4 Mar 2025
13:00 -14:15
Times are shown in local time.
Open to: All
Room W2.01 (Cambridge Judge Business School)
Trumpington St
Cambridge
CB2 1AG
United Kingdom
Join our Finance seminar
Speaker: Professor Stefano Rossi, Bocconi University
About the seminar topic
Combining different datasets for the first time, we reconstruct the debt structure of 10,136 firms operating across 52 countries from 2003 to 2021, which comprise 124,101 corporate bond issues held by 63,323 bondholders and 85,817 bank loans and credit lines extended by 10,154 banks. Total debt ownership is most concentrated in civil law countries, and most dispersed in common law countries.
There is considerable heterogeneity: In countries with stronger investor protection the debt structure features dispersed debt ownership, with dispersed arm’s length borrowing coexisting with concentrated bank borrowing. In countries with weaker investor protection, firms mitigate the unfavourable institutional environment by borrowing at shorter maturity, and by borrowing in USD-denominated (foreign) debt.
These patterns are strongest for small-to-medium size firms, whereas the largest firms have dispersed debt ownership by international investors almost irrespective of their country of incorporation. The considerable heterogeneity that we uncover along debt types and firm size thus supports the importance of considering at the same time different sources of debt, including bank loans, credit lines, and arm’s length debt, to obtain a full picture of firms’ debt structures around the world.
Our results broadly support legal origin and financial contracting theories of corporate debt structure.
Speaker bio
Stefano Rossi is a Professor of Finance in the Finance Department at Bocconi University, where he holds the Generali Chair in Insurance and Risk Management. Stefano is a Research Affiliate of the Centre for Economic Policy Research (CEPR), a Research Associate of the European Corporate Governance Institute (ECGI), an executive editor of the Journal of Law, Finance, and Accounting, and an Associate Editor of European Financial Management.
Stefano’s research interests include corporate governance, bankruptcy and financial distress, debt financing, international finance, sovereign borrowing, financing of innovations, and quantitative trading. His research has been published or is to appear in top peer-reviewed journals such as The Journal of Finance, The Journal of Financial Economics, The Review of Financial Studies, The Journal of Monetary Economics, The Journal of Economic Theory, Management Science, and The Review of Finance, and has been featured in publications such as The Financial Times and The Economist. Stefano’s research on the evolution of ownership (with J. Franks and C. Mayer) was awarded two international prizes for Best Paper by the European Corporate Governance institute.
Prior to joining Bocconi Stefano taught at the Stockholm School of Economics, Cornell University, Imperial College, and Purdue. Stefano holds a BA and an MSc in Economics from Bocconi University, Milan; and a PhD in Finance from London Business School.
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