Do corporate financial patterns in European countries converge and testitfy for disintermediation?
AbstractThis paper provides a quantitative comparison of the financial patterns of non-financial European firms for seven Continental European countries and the period 1991-2001. Our analytical framework departs from the common one as we consider that long-term and short-term sources of funds have to be analysed separately. Using the BACH database, principal component analysis, cluster analysis and econometrical tests are carried out in order to test for two hypotheses : i) there is a tendency toward grouping around a common corporate financial pattern; ii) there is a general tendency across countries toward less bank financing. We find that differences between European countries remain highly significant so that the first hypothesis is not validated. The second hypothesis is rejected with the long-term intermediation ratio but validated with the short-term one. Indeed, econometrical tests lead to a strong conclusion : the existence of a common trend toward disintermediation of short-term financing. The banking function of allocating liquidity for day-to-day business and providing a certain liquidity insurance to firms is declining whatever the size of firms.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40.
Date of creation: 2005
Date of revision:
corporate financial structure; BACH database; European convergence; financial intermediation; liquidity insurance;
Find related papers by JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-30 (All new papers)
- NEP-BAN-2006-09-30 (Banking)
- NEP-CFN-2006-09-30 (Corporate Finance)
- NEP-EEC-2006-09-30 (European Economics)
- NEP-FIN-2006-09-30 (Finance)
- NEP-FMK-2006-09-30 (Financial Markets)
- NEP-IAS-2006-09-30 (Insurance Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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