Empirical Studies on Financial Intermediation and Corporate Policies

This thesis investigates the impact of financial intermediaries on capital

structures, corporate governance structures and the performance of

firms. Throughout the world, financial intermediaries have powerful

and influential positions in financial markets. The intermediaries have

both the incentives and the means to influence the financial policies

of the firms and initiate governance changes in underperforming

management teams. On the contrary, investors have limited ability to

exercise control, even though they provide debt and equity financing

to firms.

This thesis comprises four empirical studies. In the first study, the author

analyses the impact of information asymmetry between the U.S. firms

and their lenders on firms choice of debt maturity. The second study

shows how firm-bank relations in the form of shared board positions

and equity ownerships influence capital structure decisions of Dutch

firms. The following examination in the third study of Dutch managerial

and supervisory board turnover further demonstrates the strong position

of financial institutions in disciplining underperforming management.

The fourth and final analysis in this thesis relates the dispersion in

analyst forecasts to the differences in investor opinions and investigates

how the heterogeneity of investor beliefs affects prices of European

stocks.