Do universal banks create value? Universal bank affiliation and company performance in Belgium, 1905-1909

Wouter van Overfelt, Jan Annaert, Marc de Ceuster and Marc Deloof

Working Papers from University of Antwerp, Faculty of Business and Economics

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.

Pages: 46 pages
Date: 2007-01
New Economics Papers: this item is included in nep-ban, nep-eff and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:ant:wpaper:2007001

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