Economics and BAFI Departments Research Seminar

Internal Capital Markets in Times of Crisis: The Benefit of Group Affiliation in Italy

Italy’s economic and banking systems have been under stress in the wake of the Global Financial Crisis and Euro Crisis. Firms in business groups have been more likely to survive this challenging environment, compared to unaffiliated firms. Better performance stems from access to an internal capital market, and the survival value of groups increases, inter alia, with group-wide cash flow. We show that actual internal capital transfers increase during the crisis, and these transfers move funds from cash-rich to cash-poor firms and also to those with more favorable investment opportunities. The ability to borrow externally provides additional funds that are shared across group affiliated firms. Our results highlight the benefits of internal capital markets when external capital markets are tight or distressed.

Please join the Economics Department and the Banking and Finance Department for a research seminar.  This event is open to all Case Western Reserve University faculty, Ph.D. students, Economic majors and minors,  Banking and Finance majors and minors and grad students and those interested in economics and Banking and Finance research.
 
Contact Information:

Teresa Kabat
teresa.kabat@case.edu
216.368.41

Friday, Sep. 15, 2017 from 12:30 p.m. to 2 p.m.
Peter B. Lewis Building
11119 Bellflower Road
Cleveland, OH 44106-7235
United States
Speaker(s): Philip Strahan, Ph.D., Boston College
Sponsored by: Weatherhead School of Management
Internal Capital Markets in Times of Crisi
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