Financial structure and bank relationships of Italian multinational firms

Raffaello Bronzini (), D’Ignazio, Alessio and Davide Revelli

Journal of Multinational Financial Management, 2022, vol. 66, issue C

Abstract: This paper examines the financial structure and bank relationships of multinational firms in Italy, a large European country strongly reliant on bank debt. We show that multinationals are, on average, more leveraged than non-internationalized companies. Moreover, multinationals have larger shares of both financial debt and bank debt as a percentage of total debt, benefit from lower interest rates, maintain more bank relationships, and are less dependent on the primary bank for the firm. Overall, these findings suggest that globally diversified firms have better access to credit markets than domestic companies. These results are robust to estimation methods that address the potential endogeneity of the choice to go international, such as matching and instrumental variable estimation.

Keywords: Multinational companies; Foreign direct investment; Financial structure; Bank–firm relationships; Corporate finance (search for similar items in EconPapers)
JEL-codes: D22 F21 F23 G30 L25 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mulfin:v:66:y:2022:i:c:s1042444x22000330

DOI: 10.1016/j.mulfin.2022.100762

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