Arbeitspapier

Finance and the chemical industry

The paper provides an overview of the financial history of the chemical industry since its inception in the latter half of the nineteenth century in four major countries: Britain, Germany, Japan, and the United States. The chemical industry is particularly intriguing from the point of view of financial economics because of its need to finance large and risky projects with a far-off pay-back horizon. I examine the history of the industry through the allocation and corporate governance attribute of different financial instruments. I explore how cash flow, capital expenditure, R&D intensity, and corporate strategies have been affected by the availability of funds, and the form in which they were provided. At the industry level, I ask how corporate co-ordination, consolidation and restructuring, have been influenced by financial markets. Several points emerge from this detailed empirical analysis. First, the ability to tap diverse sources of external finance has always proved important---and not only at the early stages of a firm's life. Firms which could rely on large cash flows have found it easier to retain their competitive edge. However, availability of capital is not by itself a guarantee of success, as the effectiveness of corporate governance is equally important. Also, the governance features of a financial system change with time, mostly due to changes in regulations. Public policy may then play an important role. Second, the most appropriate type of corporate governance may differ for firms at different stages of maturity. Third, the hallmarks of a country's financial system tend to persist over time, and so their effect on shaping the industry tends to be long lasting. However, in all four countries, the last two decades have witnessed a trend towards deregulation and integration of world securities markets. We should then expect some degree of convergence toward a common pattern.

Sprache
Englisch

Erschienen in
Series: Nota di Lavoro ; No. 62.1997

Klassifikation
Wirtschaft
Chemicals; Rubber; Drugs; Biotechnology; Plastics
Economic History: Manufacturing and Construction: General, International, or Comparative
Thema
Chemieindustrie
Unternehmensfinanzierung
Betriebliche Finanzwirtschaft
USA
Deutschland
Japan
Großbritannien

Ereignis
Geistige Schöpfung
(wer)
Da Rin, Marco
Ereignis
Veröffentlichung
(wer)
Fondazione Eni Enrico Mattei (FEEM)
(wo)
Milano
(wann)
1997

Handle
Letzte Aktualisierung
10.03.2025, 11:43 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Da Rin, Marco
  • Fondazione Eni Enrico Mattei (FEEM)

Entstanden

  • 1997

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