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Impact of ownership concentration on firm performance: A study of debt usage by group affiliated firms in Western Europe: A Quantitative Analysis
This research explores if and by what means concentration of bank debts is impacted by the affiliates of foreign group. Foreign multinational Company’s affiliates utilize roughly 9% lesser bank debt as compared to the domestic groups affiliates. Furthermore, the outcomes demonstrate that geographical as well as cultural distinctions between the parent as well as affiliate nations accrete the barriers while dealing with external financing. There is a reduction in the usages of bank debt as we move further, in case the affiliates as well as parent companies are dependent upon various legal systems as well as the legal enforcement scopes within the parent company’s country remains less. Such outcomes are considered to be valid following the control against the substitutability amidst bank as well as internal financing by means of their internal capital market.