IDEAS home Printed from
   My bibliography  Save this article

The Determinants of Corporate Debt Financing Strategies


  • Han-Min Wang

    (Department of Accounting, Feng Chia University, Taiwan)

  • Shiow-Huey Tsaur

    (Department of Accounting and Information Technology, Chung Cheng University, Taiwan)


This paper employs an incremental approach to explore the determinants of corporate debt financing strategies such as the factors of the issuing costs, information asymmetry, growth opportunity, credit quality and managerial ownership. Addition to univariate analysis model, we use multiple logit model to detect the affecting factors of three types of corporate debt financing policy. Empirical results show that (1) the issuing costs are not the main concern while firms choosing their debt financing sources; (2) when firms facing higher information asymmetry problems employ more non-bank private debts, and firms with lower information asymmetry problems use more public debts; (3) firms with higher growth opportunities employ more public debts, while firms with lower growth opportunities use more privately placements; (4) higher credit quality firms use more public debts, lower credit quality firms use more non-bank private debts; (5) firms with higher insider ownership use less non-bank private debts.

Suggested Citation

  • Han-Min Wang & Shiow-Huey Tsaur, 2006. "The Determinants of Corporate Debt Financing Strategies," Journal of Economics and Management, College of Business, Feng Chia University, Taiwan, vol. 2(1), pages 53-70, January.
  • Handle: RePEc:jec:journl:v:2:y:2006:i:1:p:53-70

    Download full text from publisher

    File URL:
    Download Restriction: no

    File URL:
    Download Restriction: no

    More about this item


    incremental approach; information asymmetry; multiple logit model; privately placements;

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jec:journl:v:2:y:2006:i:1:p:53-70. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Yi-Ju Su). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.