In this paper we provide evidence that the post-issue accounting profitability of firms underwritten by bank affiliated underwriters that are also borrowers from the same bank in the IPO (Initial Public Offerings) year is significantly better than average, but that the stock price performance of...

Using standard Industrial Organization tools, we analyze the relation between competition in arm's length financial markets and the prevalence of close bank-firms ties. We show how the degree of competition between financial intermediaries affects the intensity of relationships between banks and...

We examine the impact of capital markets reform on patterns of corporate finance in Israel, focusing on the role of banks in the Israeli financial system, and in particular on whether their role has changed following a decade of liberalization. Our main finding is that, although external...

Using a unique newly constructed data set on Israeli IPO firms in the 1990s, we study costs and benefits of universal banking. The post-issue accounting profitability of firms underwritten by bank affiliated underwriters that were also borrowers from the same bank in the IPO year, is...

Using a sample of Japanese firms in the chemical industry, we show that concentrated shareholding is associated with lower expenditure on activities with scope for managerial private benefits. We interpret this as evidence of a hitherto undocumented form of monitoring by large shareholders. We...

Despite significant capital-market reforms in the mid-1980s, the Israeli government and banks continue to play an unusually dominant role in Israeli financial markets. Israeli banks operate as merchant banks and, through pyramid structures of ownership, control large segments of manufacturing,...

Empirical studies of the role of large shareholders as monitors of firm management have focused on the relation between ownership structure and firm performance and have identified managerial turnover in periods of poor performance as a monitoring mechanism. Our central contribution is to...