Public/Private Transitions and Firm Financing
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.
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| Length: | 37 pages |
| Date of creation: | 2013 |
| Handle: | RePEc:bca:bocawp:13-36 |
| Contact details of provider: | Postal: 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada Phone: 613 782-8845 Fax: 613 782-8874 Web page: http://www.bank-banque-canada.ca/
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References listed on IDEAS
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