Do Universal Banks Create Value? Universal Bank Affiliation and Company Performance in Belgium, 1905-1909

Posted: 17 Sep 2008

See all articles by Wouter Van Overfelt

Wouter Van Overfelt

affiliation not provided to SSRN

Jan Annaert

University of Antwerp Department of Accounting & Finance; University of Antwerp - Antwerp Management School

Marc J. K. de Ceuster

University of Antwerp - Faculty of Applied Economics - City Campus

Marc Deloof

University of Antwerp; University of Antwerp - Antwerp Management School

Multiple version iconThere are 2 versions of this paper

Date Written: September, 15 2008

Abstract

We investigate the impact of universal bank relations on the performance and the risk of listed companies in Belgium in the period 1905-1909. Our results are consistent with the view that universal banks are efficient institutions which overcome problems of asymmetric association inevitably associated with external finance. We find that universal bank affiliation was positively linked with market-to-book ratio and return-on-assets. Performance was also positively related to the degree of bank involvement. Universal bank relations were significant and negatively correlated with volatility of return-on-assets. Finally, stock return performance, measured by the Sharpe ratio, was also significantly better for affiliated corporations.

Keywords: Company Performance, Company Risk, Universal Banks, Director Interlocks

JEL Classification: G21, G24, G30, N23

Suggested Citation

Van Overfelt, Wouter and Annaert, Jan and de Ceuster, Marc J. K. and Deloof, Marc, Do Universal Banks Create Value? Universal Bank Affiliation and Company Performance in Belgium, 1905-1909 (September, 15 2008). Explorations in Economic History, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1268374

Wouter Van Overfelt

affiliation not provided to SSRN ( email )

Jan Annaert

University of Antwerp Department of Accounting & Finance ( email )

Faculty of Applied Economics
Prinsstraat 13
Antwerp, B-2000
Belgium

HOME PAGE: http://https://www.uantwerp.be/en/staff/jan-annaert/

University of Antwerp - Antwerp Management School ( email )

Boogkeers 5
Antwerp, 2000
Belgium

Marc J. K. De Ceuster

University of Antwerp - Faculty of Applied Economics - City Campus ( email )

Office B-337
Prinsstraat 13
Antwerp, Antwerp 2000
Belgium
+ 32 3 220 41 24 (Phone)
+ 32 3 220 40 64 (Fax)

HOME PAGE: http://www.ua.ac.be/marc.deceuster

Marc Deloof (Contact Author)

University of Antwerp ( email )

Prinsstraat 13
Faculteit TEW
Antwerpen, 2000
Belgium
+32 3 265 41 69 (Phone)
+32 3 265 47 99 (Fax)

HOME PAGE: http://https://www.uantwerpen.be/en/staff/marc-deloof/

University of Antwerp - Antwerp Management School ( email )

Boogkeers 5
Antwerp, 2000
Belgium

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