Abstract: The aim of this study is to investigate on the effectiveness of debt and ownership concentration as corporate governance mechanisms. Using the largest 100 Australian firms from 1993-2008, we employ two-way fixed effects estimation. Our findings show that debt does play a role as an effective disciplinary mechanism even though there is a possibility of expropriation on small shareholders by large shareholders through their concentrated ownership. Furthermore, there is a tendency of exploiting debt by ownership concentration in its expropriation acts. Other finding reveals that these two corporate governance mechanisms should be utilised as a group rather than in isolation in order to get the effective outcome. In conclusion, it is suggested that small shareholders in the largest Australian firms still need more protection as there is a tendency that they might be exploited by the large shareholders and firms should considered in utilising both debt and ownership concentration as a group since the interaction between these two corporate governance mechanisms is more effective.