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Do universal banks create value? Universal bank affiliation and company performance in Belgium, 1905-1909

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  • VAN OVERFELT, Wouter
  • ANNAERT, Jan
  • DE CEUSTER, Marc
  • DELOOF, Marc
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    Abstract

    We investigate the impact of universal banks on the performance and the risk of affiliated companies in an unregulated environment with booming financial markets. For a unique sample of 129 Belgian companies listed in the period 1905-1909, we find that universal bank affiliation had a positive impact on the market-to-book ratio and return-on-assets. The effect on performance was positively related to the degree of bank involvement. Universal banks significantly reduced the volatility of return-on-assets. Stock return performance, measured by the Sharpe ratio, was also significantly better for affiliated corporations.

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    File URL: https://www.uantwerpen.be/images/uantwerpen/container1244/files/TEW%20-%20Onderzoek/Working%20Papers/RPS/2007/RPS-2007-001.pdf
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    Bibliographic Info

    Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2007001.

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    Length: 46 pages
    Date of creation: Jan 2007
    Date of revision:
    Handle: RePEc:ant:wpaper:2007001

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    Postal: Prinsstraat 13, B-2000 Antwerpen
    Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
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