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Corporate Capital Structure and the Influence of Universal Banks in Pre-World War I Germany

Fohlin, Caroline (2002) Corporate Capital Structure and the Influence of Universal Banks in Pre-World War I Germany. Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, 43 (2). ISSN 0075-2800. doi:10.1524/jbwg.2002.43.2.113.

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Economic historians have credited the German universal banks with lowering the costs and raising the efficiency of corporate finance. Because of the apparent monitoring they represent, formal bank relationships are thought to ameliorate problems of asymmetric information that normally limit firms’’ access to outside finance. In a large sample of German firms circa 1904, bank oversight is associated with slightly higher leverage but not with greater use of bank debt. Older and cash-rich firms have lower leverage and less bank debt, suggesting that information problems affected firms’ financing decisions. Bank attachment alters these patterns only minimally. The findings suggest that bank oversight had little to do with leverage decisions, particular short-term borrowing, in the later stages of the German industrialization.

Item Type:Article
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URLURL TypeDescription ItemWorking Paper
Fohlin, Caroline0000-0002-1380-2788
Alternate Title:Corporate Capital Structure and the Influence of Universal Banks in Pre-War Germany
Additional Information:© 2014 Akademie Verlag GmbH, Markgrafenstr.
Issue or Number:2
Record Number:CaltechAUTHORS:20170816-155900289
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80524
Deposited By: Tony Diaz
Deposited On:16 Aug 2017 23:17
Last Modified:15 Nov 2021 19:36

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