Public/Private Transitions and Firm Financing

Kim Huynh, Teodora Paligorova () and Robert Petrunia

Staff Working Papers from Bank of Canada

Abstract: A large body of empirical literature investigates differences in financing structures across firms. Private firms’ financing receives little attention due to the lack of data. Using administrative confidential data on the universe of Canadian corporate firms, we compare financing relationships for private and public firms. Leverage ratios are lower for public firms and the difference is almost entirely driven by private firms’ stronger reliance on short-term debt. We also find that private and public firms’ debt financing responds differently to industry shocks. In periods of positive industry shocks, private firms rely more on long-term debt than public firms, while the former use more short-term debt when industry conditions deteriorate.

Keywords: Credit and credit aggregates; Financial markets (search for similar items in EconPapers)
JEL-codes: G30 L11 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2013
New Economics Papers: this item is included in nep-bec and nep-ifn
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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocawp:13-36

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