Empirical Studies on Financial Intermediation and Corporate Policies Defended on Thursday, 30 September 2004
This thesis investigates the impact of financial intermediaries on capital structures, corporate governance structures and the performance of firms. Throughout the world, financial intermediaries have powerful and influential positions in financial markets. The intermediaries have both the incentives and the means to influence the financial policies of the firms and initiate governance changes in underperforming management teams. On the contrary, investors have limited ability to exercise control, even though they provide debt and equity financing to firms. This thesis comprises four empirical studies. In the first study, the author analyses the impact of information asymmetry between the U.S. firms and their lenders on firms choice of debt maturity. The second study shows how firm-bank relations in the form of shared board positions and equity ownerships influence capital structure decisions of Dutch firms. The following examination in the third study of Dutch managerial and supervisory board turnover further demonstrates the strong position of financial institutions in disciplining underperforming management. The fourth and final analysis in this thesis relates the dispersion in analyst forecasts to the differences in investor opinions and investigates how the heterogeneity of investor beliefs affects prices of European stocks.
Debt Maturity, Asymmetric Information, Capital Structure, Firms and Banks, Moral hazards, Management turnover, Wealth effects, European Stock Returns, Dispersion, European financial system, Financial Intermediation, Corporate Policies