This report evaluates and compares the evolution and the determinants of the capital structure of Brazilian firms, with a particular emphasis on external financing. One of its main conclusions is that country factors are nearly as important as firm level factors. Industry factors are not very important. In terms of the total debt levels, Brazilian firms have behaved differently from those in other emerging markets, particularly from those in Asia. While Brazilian firms have been increasing their total debt levels, in Asia there is a decreasing debt trend. The Brazilian economic tability is recent and the low foreign exchange volatility, the economic cycle, as well as the quality of institutions, such as the judiciary, are instrumental for the increase of debt levels. Firms in countries with more credit restrictions take on more debt when the economy grows. The demand for foreign exchange risk hedging has fallen in recent times, but the supply of such instruments seems to have been adequate. The term of such hedging instruments is increasing, despite the lower demand. There was no evidence that Brazilian public companies behave differently from those in other emerging economies with a similar external debt risk. A comprehensive literature review on the subject is presented, including research about non-public firms.Brazilian data on all the issues reported are also presented.