The The Shift in Firms’ Reliance on Debt Sources
Structural changes in capital market and information innovations have altered characteristics of debt sources, make them more or less favourable to firms. This could possibly lead to a shift in firms' reliance on debt sources. Using a unique data set of debt mix of 1,100 U.S. non-financial firms, I conduct data analysis to reveal changes in firms' preference for different debt sources over a decade from 2004 to 2014. I find that bank debt remains the most common source of borrowing, followed by public debt and finally private placement debt. In addition, over time, firms have become more reliant on bank and public debt while less reliant on private placement debt. This pattern is consistent across different industries.
Copyright (c) 2019 Tu Cam Ho
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors submitting articles for publication warrant that the work is not an infringement of any existing copyright and will indemnify the publisher against any breach of such warranty. By publishing in Applied Finance Letters, the author(s) retain copyright but agree to the dissemination of their work through Applied Finance Letters.
By publishing in Applied Finance Letters, the authors grant the Journal a Creative Commons nonexclusive worldwide license (CC-BY-NC-ND: Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License) for electronic dissemination of the article via the Internet, and, a nonexclusive right to license others to reproduce, republish, transmit, and distribute the content of the journal. The authors grant the Journal the right to transfer content (without changing it), to any medium or format necessary for the purpose of preservation.
Authors agree that the Journal will not be liable for any damages, costs, or losses whatsoever arising in any circumstances from its services, including damages arising from the breakdown of technology and difficulties with access.