Firm Performance, Financial Institutions and Corporate Governance in the Netherlands
AbstractThis paper analyses the impact of share ownership, creditorship and networking by financial institutions on the performance of 94 Dutch non-financial firms in the period 1992-1996. We find a nonlinear relationship between firm performance and ownership by banks. Because of various defense mechanisms the role of the shareholder is very limited in the Netherlands. Financial institutions are, however, in a position to discipline firm management through other channels. It turns out that there is a direct positive link between share o wnership by banks and the firms` short-term bank loans, which indicates the existence of a financing channel. Financial institutions are also represented on the supervisory boards of firms and vice versa, which is an example of networking. This suggests that besides creditorship networking may be an additional disciplinary device for financial institutions. Here we find that there is a significant positive relationship between share ownership by insurance companies and pension funds and the probability of networking.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 210.
Date of creation: 1999
Date of revision:
Other versions of this item:
- Chirinko, Bob, 1999. "Firm performance, financial institutions and corporate governance in the Netherlands," Research Report 99E40, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
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