Open AccessBank influence, firm performance and survival: Empirical evidence from Germany 1970-1986
Author(s) -
Julie Ann Elston
Publication year - 2003
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv1i2p5
Subject(s) - corporate governance , german , business , empirical evidence , agency cost , agency (philosophy) , accounting , principal–agent problem , monetary economics , financial system , economics , finance , shareholder , philosophy , epistemology , archaeology , history
This paper systematically investigates the impact of bank-influence on firm performance and survival in Germany. Close bank-firm relationships and concentrated ownership which characterize the Japanese and German financial and governance systems are often credited with reducing agency problems and improving monitoring of firm activities, thus improving firm performance and the chances of survival. Empirical results reveal that bank influenced firms have higher survival rates than independent firms. However, firm growth appears to be independent of bank influence and negatively related to firm size.