Bank debt and performance of Continental European firms
by Victoria Krivogorsky, Gary Grudnitski, Wolfgang Dick
International Journal of Economics and Business Research (IJEBR), Vol. 3, No. 6, 2011

Abstract: When the source of external capital for Continental European firms is examined, debt markets have historically supplied a much larger percentage of the external capital than equity markets, and firms rely much more on bank debt than bonds for their external funds. In this environment banks have incentives to either monitor or actually manage firms depending on their relative debt stake in those firms. The objective of this paper is to assess the association between firm performance and level bank debt for firms from seven Continental European countries. After controlling for firm- and country-specific characteristics, we find bank debt is correlated with a firm's accounting performance as measured by return on assets (ROA) and return on shareholders' funds. When repeating the analysis on a country-by-country basis, an association is found between bank debt and ROA.

Online publication date: Wed, 22-Apr-2015

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economics and Business Research (IJEBR):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com