Corporate Debt Structure Around the World

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. These patterns are most pronounced among small-to-medium size firms, whereas the largest firms have dispersed debt ownership by international investors almost irrespective of their country of incorporation. In weaker investor protection environments, firms mitigate the unfavorable institutional environment by borrowing at shorter maturity and in USD-denominated debt. Our results broadly support legal origin and financial contracting theories.