The purpose of this project is to study from a theoretical and empirical perspective how companies structure their debt. For example, what determines whether companies borrow from banks or issue public debt; whether companies issue secured or unsecured loans; and whether they borrow short or long term. This study is important because it help us better understand the effects of financial regulation, financial distress, and macroeconomic fluctuations. There are three topics to the project, two of which are empirical. The first will analyze the recent shift in Japan away from bank financing toward public debt financing using a detailed firm-level database of Japanese companies. The second part will develop a firm-level U.S. corporate debt structure and analyze both how debt is determined and how debt structure affects the ability of firms to respond to macroeconomic and industry fluctuations. The third topic is a theoretical analysis which involves constructing a model that incorporates important aspects of debt structure, such as the choice of how many creditors to borrow from and the assignment of security interests.