Holding companies, which play an important role in corporate finance in Belgium and in other Continental European countries, often trade at a discount to their estimated net asset value (NAV). In the first part of this paper, we provide a structured analysis of possible explanations for the...

Business groups have the potential both to offer benefits to member companies, and to destroy value. A number of studies find that group affiliation creates value for companies in emerging markets like Chile, India, Korea and Turkey. This raises the question whether business groups can also...

In Belgian corporate groups, complex pyramidal structures and interlocking ownership lead to separation of ownership and control. This may generate incentives for the controlling shareholder to divert resources within the group through intragroup equity sales. This in turn could lead to...

We investigate the role of trade credit as a source of financing. Using a sample of 661 large non-financial Belgian firms for the 1989-1991 period, we find that the amount of trade credit a buyer takes is determined by his need for funds and the internally available funds. Trade credit is...