Ownership concentration and debt are important corporate governance mechanisms used by the large firms in Australian market. Their relationships are not correctly modeled in the existing literature and agency theory basis and the implications of these relationships for some financial issues such as capital structure decisions have not yet been analysed satisfactorily in the literature. The current study full-fills this gap by controlling dynamic endogeneity and heterogeneity issues by using the dataset from the period 1997 to 2008 for 220 large Australian firms, and employing two-way fixed effects (FE) and the two-step system generalised method of moments (GMM). This study finds nonlinear and complex nature of the relationships among ownership concentration, debt and firm value and suitability of GMM methods in modeling these relationships. The results prove the detrimental role of majority shareholders and lower level of debt in these firms. Finally, the results also endorse the value enhancing effect of high level of debt supporting pecking order and control preference theory in the Australian market.