Do Universal Banks Create Value? Universal Bank Affiliation and Company Performance in Belgium, 1905-1909
AbstractWe 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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Bibliographic InfoPaper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2007001.
Length: 42 pages
Date of creation: Jan 2007
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-20 (All new papers)
- NEP-BAN-2007-10-20 (Banking)
- NEP-EFF-2007-10-20 (Efficiency & Productivity)
- NEP-HIS-2007-10-20 (Business, Economic & Financial History)
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