Abstract
This paper systematically investigates the impact of bank-influence on firm performance and survival in Germany. Close bank-firm relationships and concentrated ownership which characterize the Japanese and German financial and governance systems are often credited with reducing agency problems and improving monitoring of firm activities, thus improving firm performance and the chances of survival. Empirical results reveal that bank influenced firms have higher survival rates than independent firms. However, firm growth appears to be independent of bank influence and negatively related to firm size.
Subject
General Business, Management and Accounting
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