I examine the relation between corporate debt ownership structure and several firm characteristics suggested by recent theory. The results demonstrate the importance of monitoring and information costs, the likelihood and costs of inefficient liquidation, and borrowers' incentives in affecting firms' debt source preferences. Several theoretical predictions receive support, while others do not. The results also suggest important differences between bank and private non-bank debt, which contrasts with most theoretical models. Additionally, I find evidence of systematic use of bank debt by firms with access to public debt, suggesting the benefits attributed to bank debt in theoretical models remain important after firms gain access to public debt markets. Although different lenders appear to have different maturity preferences, the results also suggest debt maturity and debt ownership decisions may be separable.

Recent theoretical models suggest debt and dividends can serve as substitute free cash flow control or signaling devices. I examine share price responses to announcements of straight debt issues and test whether there are systematic differences between low and high dividend payout firms. Share price response is significantly positive for low growth-low dividend payout firms, and is negatively related to cross-sectional dividend payout. The results support arguments that debt and dividends are substitutes. The results also support arguments that debt provides free cash flow or signaling benefits, but suggest the benefits are significant only for firms with low levels of substitutes. I also document that low growth-low dividend payout firms enter capital markets less frequently, but find no relation between share price response and this frequency.

We distinguish between horizontal and vertical joint ventures, and find correspondingly different valuation effects. Horizontal joint ventures create synergistic gains that are shared by the partners. In contrast, vertical joint ventures generate gains only for suppliers. This is similar to the patter we find for simple contracts, which suggests economic similiarities between vertical joint ventures and contracts. Analysing firms' choices between these contracting options, we find that firms choose vertical joint ventures over simple contracts when potential hold-up problems are severe and when suppliers face finance constraints. The results d not support a risk-sharing motive for joint ventures.