Sources peter behr cause of death mistrust washington

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Unformatted text preview: k (January 28, 2002). Capital Structure of Non-U.S. Firms In general, non-U.S. companies have much higher degrees of indebtedness than their U.S. counterparts. Most of the reasons for this are related to the fact that U.S. capital markets are much more developed than those elsewhere and have played a greater role in corporate financing than has been the case in other countries. In most European countries and especially in Japan and other Pacific Rim nations, large commercial banks are more actively involved in the financing of corporate activity than has been true in the United States. Furthermore, in many of these countries, banks are allowed to make large equity investments in nonfinancial corporations—a practice that is prohibited for U.S. banks. Finally, share ownership tends to be more tightly controlled among founding-family, institutional, and even public investors in Europe and Asia than it is for most large U.S. corporations. Tight ownership enables owners to understand the firm’s financial condition better, resulting in their willingness to tolerate a higher degree of indebtedness. On the other hand, similar...
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