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

43 Pages Posted: 8 Feb 2007

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: December 2006

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.

Keywords: Universal Banking, Company Performance, Company Risk, 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 (December 2006). Available at SSRN: https://ssrn.com/abstract=949709 or http://dx.doi.org/10.2139/ssrn.949709

Wouter Van Overfelt (Contact Author)

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

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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