Who's Afraid of Universal Banks? Bank Affiliations and Corporate Dividend Policy in Pre-World War I Belgium

49 Pages Posted: 21 Feb 2007

See all articles by Marc Deloof

Marc Deloof

University of Antwerp; Antwerp Management School

Annelies Roggeman

University of Antwerp

Wouter Van Overfelt

affiliation not provided to SSRN

Date Written: December 2006

Abstract

We investigate the impact of universal banks on the dividend policy of affiliated companies, in an environment characterized by poor investor protection, booming stock markets and strong banks. Our results, based on a unique, hand-collected sample of 428 listed companies in pre-World War I Belgium, are consistent with the hypothesis that companies with a bank director on their board paid high and stable dividend to establish a good reputation with investors. However, we also find that companies with several bank directors and companies in which the bank had an equity stake paid lower dividends.

Keywords: Dividend policy, universal banks, bank directors, investor protection, pre-World War I Belgium

JEL Classification: G21, G35, N23

Suggested Citation

Deloof, Marc and Roggeman, Annelies and Van Overfelt, Wouter, Who's Afraid of Universal Banks? Bank Affiliations and Corporate Dividend Policy in Pre-World War I Belgium (December 2006). EFA 2007 Ljubljana Meetings Paper. Available at SSRN: https://ssrn.com/abstract=964149 or http://dx.doi.org/10.2139/ssrn.964149

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/

Antwerp Management School ( email )

Het Brantijser
Sint-Jacobsmarkt 9-13
Antwerp, 2000
Belgium

Annelies Roggeman

University of Antwerp ( email )

Prinsstraat 13
Antwerp, Antwerp 2000
Belgium

Wouter Van Overfelt

affiliation not provided to SSRN ( email )

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