The determinants of leverage; differences between quoted and non quoted firms.

The design of capital structure in quoted companies has received much attention in the academic literature. Using panel data from quoted as well as non quoted Belgian companies, this paper investigates not only the determinants of capital structure, but also the influence of a stock listing on the relationship between these determinants and leverage. Overall our empirical results are in line with previous studies and support mainly the Pecking Order theory. Also in line with the predictions of the Pecking Order theory, quoted companies are less levered, even when controlling for other determinants of capital structure. Furthermore we find that the determinants of capital structure differ to some extend between quoted and non quoted companies.Accounting; Companies; Efficiency; Factors; Information; Model; Models; Performance; Ratios; Research; Determinants; Firms; Design; Capital structure; Structure; Panel data; Data; Studies; Order; Theory; Predictions;

The impact of a stock listing on the determinants of firm performance.

Research on the question of what makes firms perform well has shown that product market competition, financial pressure and ownership or ownership identity are important performance drivers. Recently the issue of whether or not their impact is influenced by environmental or contextual characteristics has received increasing attention. In this paper we test, on a sample of Belgian firms, whether performance drivers behave differently in a non-quoted environment as compared to a quoted one. Our main result is that the impact of competition, financial pressure and family control does indeed depend upon whether the firm is quoted or not. Overall, for nonquoted companies the performance drivers do not enhance performance and in mostcases are even detrimental. For quoted companies however the results are just the opposite. We find that this difference in driver functioning explains the better performance of quoted firms vis-à-vis their private peers.Research; Impact; Determinants; Firms; Product; Market; Competition; Ownership; Performance; Characteristics; Belgian firms; Control; Companies; Firm performance;

Structuring the IPO: Empirical evidence on the primary and secondary portion.

We empirically study the determinants of the size of the primary and secondary portion in IPOs. Simultaneously, the results provide additional information on the motives for going public. The data show that financing needs underlie the primary portion. Firms use combined offerings to enhance market liquidity, whereby information gathering by institutional investors is stimulated. Pre-allocation and post-IPO data on market liquidity and seasoned equity offerings support these findings. Somewhat surprisingly, the diversification motive does not seem to drive the size of the secondary portion; however, secondary offerings show relatively higher control turnover post-IPO.Data; Firms; Information; Market; Size; Studies;

Legal reform and aggregate small and micro business bankruptcy rates: Evidence from the 1997 Belgian Bankruptcy Code.

Bankruptcy; Business;

Filtering speed in a continental European reorganization procedure.

Recent studies of U.S. Chapter 11 show it to be a relatively efficient procedure. We examine reorganization cases in a Continental European, creditor-oriented bankruptcy system, viz. Belgium, and report very different findings. Using hazard and cure regression models to determine what drives the length of time spent in reorganizations, we find evidence suggesting that courts have little impact on the screening and filtering process. In fact, virtually all drivers of procedure length prove to have the opposite sign of what one would expect if the procedure would efficiently realise its goals. Instead, the procedure appears to be mainly creditor driven.Reorganization; Bankruptcy; Hazard models; Filtering speed;

The impact of growth opportunities on the investment-cash flow sensitivity.

This paper investigates the impact of growth opportunities on the interpretation of investment-cash flow sensitivity of large Belgian companies. We use data on long time listed firms, recent IPO firms and large unlisted firms to incorporate a wide variation in information asymmetry. Our results reveal that when information asymmetry is high, decreasing cash flow sensitivity as growth prospects improve is not necessarily caused by agency costs of free cash flow. Rather, it may indicate that capital constrained firms increase the use of external financing in high growth periods as these financing sources then tend to become more appealing.

Internal capital markets and capital structure: Bank versus internal debt.

Recent empirical evidence has shown that internal capital markets within multinational corporations are used to reduce overall financing costs by optimizing the mix of internal and external debt of affiliates in different countries. We show that this cost saving use of internal capital markets is not limited to multinationals, but that domestic business groups actively optimize the internal/external debt mix across their subsidiaries as well. We use both subsidiary and group level financial statement data to model the bank and internal debt concentration of Belgian private business group affiliates and show that a pecking order of internal debt over bank debt at subsidiary level leads to a substantially lower bank debt concentration for group affiliates as compared to stand-alone companies. However, as the group's overall debt level mounts, groups increasingly locate bank borrowing in subsidiaries with low costs of external financing (i.e. large subsidiaries with important collateralable assets) to limit moral hazard and dissipative costs.Internal capital markets; Capital structure; Debt source concentration; Ownership structure; Bank debt;