Bank on Steel? Joint-Stock Banks and the Rationalisation of the British Interwar Steel Industry
Simon C. Holmes, Florian Ploeckl
Abstract
This study investigates the impact of joint-stock banks on the rationalisation of the British interwar steel industry. A new panel data set of steel firm characteristics covering 1920 to 1938 is used to document rationalization and bank involvement, including interlocking directorships, with both found to be more extensive than previously thought. A set of all potential amalgamation pairs is created and used in a logit analysis of the determinants of mergers. Bank involvement with firms increased the probability that a particular merger occurred. Furthermore mergers with bank involvement did not increase the involved firm’s profitability, while those without did.
Keywords: Banking, Steel industry, Rationalization, Mergers, Interwar Britain
Date: January 2012 | Reference number(s): , Number 93
Series: Oxford Economic and Social History Working Papers
JEL Classifications: L61, N24, N64