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The Financing of Industry, 1970-89: An International Comparison

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  • Corbett, Jennifer
  • Jenkinson, Tim

Abstract

The main aims of this paper are, first, to construct a consistent comparative set of data on the sources of finance for investment over the period 1970--89 for Germany, Japan, the United Kingdom and the United States and second, to challenge some conventional views of the international differences in financing patterns. The paper documents the substantial problems of international comparisons, and argues that net sources and using data based on National Income Accounts provide the most appropriate and consistent information. We conclude that there is no `market-based' Anglo-US pattern of financing of industry. Germany, the United Kingdom and the United States are internally financed with small or negative contributions from market sources. Japan has been more externally financed with both banks and markets contributing larger shares than in the former group. Over the 1980s, the period of financial liberalization, all countries, except Japan, have become more internally and less market financed.

Suggested Citation

  • Corbett, Jennifer & Jenkinson, Tim, 1994. "The Financing of Industry, 1970-89: An International Comparison," CEPR Discussion Papers 948, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:948
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    Citations

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    Cited by:

    1. Singh, A., 1997. "Liberalisation, the Stock Market and the Market for Corporate Control: A Bridge Too Far for the Indian Economy?," Accounting and Finance Discussion Papers 97-af35, Faculty of Economics, University of Cambridge.
    2. Audretsch, David B. & Elston, Julie Ann, 2002. "Does firm size matter? Evidence on the impact of liquidity constraints on firm investment behavior in Germany," International Journal of Industrial Organization, Elsevier, vol. 20(1), pages 1-17, January.
    3. de Haan, Leo & Hinloopen, Jeroen, 2003. "Preference hierarchies for internal finance, bank loans, bond, and share issues: evidence for Dutch firms," Journal of Empirical Finance, Elsevier, vol. 10(5), pages 661-681, December.
    4. Ajit Singh, 1998. "Financial liberalisation, stockmarkets and economic development," Nova Economia, Economics Department, Universidade Federal de Minas Gerais (Brazil), vol. 8(1), pages 165-182.
    5. Singh, Ajit, 1994. "Corporate financial patterns in industrialising economies: a comparative international study," MPRA Paper 54936, University Library of Munich, Germany.
    6. Ajit Singh, 1999. "Should Africa promote stock market capitalism?," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(3), pages 343-365.
    7. Singh, Ajit & Singh, Alaka & Weisse, Bruce, 2002. "Corporate governance, competition, the new international financial architecture and large corporations in emerging markets," MPRA Paper 53665, University Library of Munich, Germany.
    8. Victor Murinde & Juda Agung & Andy Mullineux, 2004. "Patterns of Corporate Financing and Financial System Convergence in Europe," Review of International Economics, Wiley Blackwell, vol. 12(4), pages 693-705, September.
    9. Sanjiva Prasad & Christopher J. Green & Victor Murinde, 2001. "Company Financing, Captial Structure, and Ownership: A Survey, and Implications for Developing Economies," SUERF Studies, SUERF - The European Money and Finance Forum, number 12 edited by Morten Balling, May.
    10. Sanjiva Prasad & Christopher J. Green & Victor Murinde, 2005. "Company Financial Structure: A Survey and Implications for Developing Economies," Chapters, in: Christopher J. Green & Colin Kirkpatrick & Victor Murinde (ed.), Finance and Development, chapter 12, Edward Elgar Publishing.
    11. Singh, Ajit, 2001. "Corporate financing patterns in emerging markets in the 1980s and the 1990s," MPRA Paper 53663, University Library of Munich, Germany.
    12. Hanazaki, Masaharu & 花崎, 正晴 & ハナザキ, マサハル & Takeuchi, Akie, 2001. "An International Comparison of Corporate Investment Behavior: Some Implications for the Governance Structure in Japan," CEI Working Paper Series 2001-1, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    13. repec:dgr:uvatin:20020072 is not listed on IDEAS

    More about this item

    Keywords

    Corporate Finance; International Comparisons; Investment;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • P52 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Studies of Particular Economies

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