Essays on Financing and Performance: The role of firms, banks and boards

Philip Fliers

Research output: Types of ThesisDoctoral ThesisExternally prepared

Abstract

The way firms and their boards interact with their shareholders or financiers is a difficult balancing act. How firms, banks and board fulfil their role has a significant impact on corporate financing decisions and performance. In three studies, this dissertation combines studies in economic history with contemporary research in corporate finance. The first study investigate the determinants of this bank distress in the Netherlands during the 1920s. During this period the Dutch economy suffered an unequalled financial crisis. This study finds that during this time, banks that acquired too much leverage and attracted large quantities of deposits were more likely to fail. More so the investigation showed that international activities increased bankruptcy risk and that board characteristics, such as interlocking directorates, were important determinants of failure probabilities. The second study takes a more long-run perspective and examines the relation between individual Dutch board members and the outcome of corporate policies such as dividends, investments and capital structures over the entire twentieth century. The study shows that individual Dutch directors have significant impact on corporate policies and performance, their contribution explains between four and eleven percent of the cross-sectional variation in various key metrics over the century. Moreover the study identifies individuals with substantial contributions to corporate performance and provides a historical understanding of the effects these individuals have on corporate policies. Results suggest that the impact of big linkers is primarily due to their social capital and their extensive management experience. The third study investigates the impact of corporate financial flexibility on dividend smoothing practices. First, the study documents that firms smooth their dividends more when they are more financially flexible. Second, the examination shows that firms smooth their dividends more when agency costs are high and that corporate capital structure choices absorb shocks to net income and enables dividend smoothing. The empirical results of these studies highlight each in their own manner the role of firms, banks and boards.
Original languageEnglish
Awarding Institution
  • Erasmus University Rotterdam
Supervisors/Advisors
  • de Jong, Abe, Supervisor
  • Roosenboom, Peter, Co-supervisor
  • Schoenmaker, Dirk, Doctoral committee member
  • Wagner, Wolf, Doctoral committee member
Award date17 Jun 2016
Place of PublicationRotterdam
Print ISBNs9789058924476
Publication statusPublished - 17 Jun 2016

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