Belgian Firms Research Articles

Internal Capital Markets, Bank Borrowing, and Financing Constraints: Evidence from Belgian Firms

In Belgium, financial and industrial groupings play a crucial role in the accumulation and allocation of capital in the economy. In this paper, it is hypothesized that Belgian firms for which investment is partly financed on an internal capital market, will not be subject to financing constraints to the same extent as firms which have to borrow from banks. Moreover, it is hypothesized that firms belonging to a group, transfer internal surpluses of funds to other group members by investing in financial assets. An empirical analysis confirms the first hypothesis, but rejects the second hypothesis.

Strategies and industrial reality: Experience from belgian firms

Strategies and industrial reality: Experience from belgian firms

Corporate groups, liquidity, and overinvestment by Belgian firms quoted on the Brussels stock exchange

For a sample of large Belgian non-financial firms quoted on the Brussels stock exchange, it is found that investment of firms borrowing on an internal capital market is not determined by internal cash flow, while cash flow has a significant effect on investment for the other firms in the sample. Further analysis indicates that the cash flow effect is caused by overinvestment, not by financing constraints. No evidence is found that firms borrowing on an internal capital market in turn transfer surpluses of funds to other group members by investing in financial fixed assets. © 1998 John Wiley & Sons, Ltd.

Corporate groups, liquidity, and overinvestment by Belgian firms quoted on the Brussels stock exchange

Corporate groups, liquidity, and overinvestment by Belgian firms quoted on the Brussels stock exchange

The structure of the Belgian audit market: the effects of clients’ concentration and capital market activity

Most national audit markets are dominated by a few relatively equal-sized international audit firms. The likelihood of collusive behaviour in the market for audits is affected by the combined market share of the leading audit firms. This paper provides empirical evidence on the structure of the market for audits in Belgium. The main data set used in the study consists of about 10500 clients of Belgian audit firms in the year 1987. In that year only a publication containing detailed information on auditor—client relationships was published for the Belgian audit market. For more recent years, aggregated data on the Belgian audit market as a whole are included in this paper. The clients included in the data set are categorized into 62 different industry groups. For each industry the level of auditor concentration, measured by CR4, CR8 and the Hirschman—Herfindahl index, is computed. The results show that a loose oligopoly is the dominant market structure for audit industry groups in Belgium. The findings also indicate that concentration is influenced by the level of concentration of the underlying client industry, and by the level of clients' capital market activity.

The Role of the Banker in Financing Medium-sized Firms in Belgium: Lender or Adviser?

This article analyses, on the basis of a field study, the role of banks in financing medium enterprises in Belgium. It shows that, like small firms, medium-sized businesses have a preference for self-financing. As far as external funding is concerned, debt is generally their main source. How ever, their low debt ratios indicate that, as compared to the large firms, these enterprises take less recourse to banks and, as a result, pay little attention to their financial function. The banker does not play an important role as an adviser either, except when the firm decides to raise funds through the stock market. The article calls for greater specialisation on the part of the banks so that they can avoid conflicts of interest arising out of the mismatch between their service priorities and the needs of their clientele.

How elastic is the demand for labour in Belgian enterprises? Results from firm level accounts data, 1987-1994

This paper analyzes wage elasticities using a panel dataset of 2800 large Belgian firms over the period 1987–1994. We explore various functional forms and find that the short-run wage elasticity varies between −0.37 and −0.65, while the long-run elasticity is robustly estimated to be larger than 1 in absolute value. These results are striking for they are much higher than those reported in previous studies using macroeconomic time-series data. This suggests that labour costs are more important in determining the demand for labour than initially was believed.

Free trade or protection? belgian textile and clothing firms’ trade preferences

Free Trade or Protection? Belgian Textile and Clothing Firms' Trade Preferences. -This paper examines the positions of Belgian textile and clothing firms on trade policies. Observations on positions are generated by a survey. Along the lines of the political economy of protection and anti-protection we test whether firm-specific characteristics influence textile and clothing firms' trade policy preferences. The results show that international competition and having foreign establishments significantly determine firms' positions, but that product differentiation does not. A Chow test indicates no significant difference between firms' sensitivities in the textile and clothing industries. This suggests that the two professional organizations should co-operate on trade issues.

Capacity Constraints and Export Performance: Theory and Evidence from Belgian Manufacturing

A mark-up model for export and domestic pricing is developed using the dual approach of cost functions and taking explicitly into account the possibility of (short-run) capacity constraints. The model is applied on a panel of Belgian firms to infer product market power on both domestic and export markets, as well as to estimate the effect of export activity on the firm technology and pricing, through the effect of cost flexibility and capacity utilization. Copyright 1996 by Blackwell Publishing Ltd.

Bargaining over employment as a firm strategic choice

This paper develops a simple model as to why unionized Cournot firms acting non-cooperatively in the product market may find it optimal to commit to bargaining outcomes with their specific union, which are off the labor demand curve, hence restricting their behavior to non-profit maximizing practices in their product markets. The prediction that power over labor conceded strategically to the union by the firm is negatively linked to union wage power is not rejected on a panel of Belgian firms as well as the prediction that the union bargaining power can be affected by product market structure and other variables affecting union wages.

Union-Firm Bargaining and the Influence of Product Market Power and Production Technology on Systematic Risk

The relationship between the CAPM firm beta and the firm's microeconomic decisions is studied by a model under uncertainty, which combines the feature of an ex ante “inputs substituable” production technology and the existence of a union which bargains over various economic dimensions of the firm. It is shown that the earlier findings of a relationship between the firm beta, the firm product market power, and the labor-capital ratio may be reinforced through the indirect channel of labor market bargaining, but the relationship becomes more complex, and heavily depends on the scope of the union-firm bargaining process. This yields the empirical prediction, confirmed for a panel of Belgian firms, that any proper estimation of the determinants of firm beta, must control for firms in the sample being unionized.

De rol van de overheid in het Europeaniseringsproces van het bedrijfsleven in België

The European internal market presents an enormous challenge for business firms in a small open economy. Major adjustments may be in order in certain business sectors, as the success of 1992 will in first instance depend upon the dynamism of the Belgian firms themselves.Whithin the federal context of a simultaneous devolution of powers towards the European level and towards lower-level jurisdictions in Belgium, the functions of governments have to be redefined. The process of translating European directives into national law and of further adapting the legal and economic framework, especially in the financial field, has just taken off in Belgium. However, a more continuous effort of modernising the institutional and economic environment will be in order for the years to come.

Cost accounting methods and characteristics of firms: Case studies from Belgium

Etienne van Geyt set up a research project using data from Belgian industrial firms to explore the relationship between cost accounting methods used by these firms and certain characteristics of the firms like cost structure, fluctuating sales and extent of production capacity used. His research results, which are statistically significant, indicate that for Belgian firms, those using variable costing for internal reporting have more greatly fluctuating production and sales, a lower percentage of fixed production costs to total production costs and a greater homogeneity of the production process than firms employing full-cost accounting methods.

Aspects de l’expansion belge en Égypte sous le régime d’occupation britannique (1882-1914)

Contrary to what happened in Iran, most Belgian Businesses in Egypt at the end of the 19th. and the beginning of the 20th. centuries enjoyed success. The contact between “entrepreneurs” from Belgium firms and the Egyptians was generally good. In more than one case the collaboration between the two parties was fruitful and, for the Belgian firms, the results were often impressive. It go es without saying that the period under review was colonial and theist, even if the Belgians were not directly involved in colonial activities in Egypt, the spirit in which they operated had many of the characteristics of the one that lay behind all European firms in Africa and Asia at the time. The author has based himself on a mass of documentary material from the Belgian Ministry of Foreign Affairs and can only express regret that he did not have access to papers belonging to certain private firms whose activities in Egypt were of prime importance.

How Belgian business make strategic planning work

The research findings reported in this article are based on a study of formal strategic planning practices in 82 Belgian firms. Information was also obtained about planning practices in 42 non-strategic planning firms. The findings of the research allowed the authors to determine the present state of affairs of strategic planning in the average Belgian firm.

Enterprise and History: Essays in Honour of Charles Wilson

Preface List of contributors Part I. Images and Interpretations: 1. Comparative business history Alfred D. Chandler Jr 2. Historians and businessmen D. C. Coleman 3. Businessmen and their motives W. J. Reader 4. La revolution manquee R. M. Hartwell Part II. England and the Low Countries in Pre-Industrial Times: 5. Bruges as a trading centre in the early modern period J. A. van Houtte 6. English re-exports and the Dutch staplemarket in the eighteenth century David Ormrod 7. 'Little London': British merchants in Rotterdam during the seventeenth and eighteenth centuries P. W. Klein 8. Prejudice and policy: Sir George Downing as parliamentary entrepreneur Henry Roseveare 9. The lawyer as businessman in eighteenth-century England Peter Mathias Part III. Enterprise, Finance and Politics in the Modern World: 10. The Bank of Rome and commercial credit, 1880-1914 L. de Rosa 11. The scientific brewer: founders and successors during the rise of the modern brewing industry Kristof Glamann 12. Large firms in Belgium, 1892-1974: an analysis of their structure and growth Herman van der Wee 13. 'No bloody revolutions but for obstinate reactions'? British coalowners in their context, 1919-20 Barry Supple 14. French oil policy, 1917-30: the interaction between state and private interests R. W. Ferrier 15. Reflections on the Dutch economic interests in the East Indies H. Baudet Bibliography of Charles Wilson's published works Index.

Price Formation and the Scope for Oligopolistic Conduct in a Small Open Economy

The aim of this paper is to derive and test equilibrium relations between aggregated indices of market power, concentration and foreign trade variables. Encaoua and Jacquemin (1980) established such relationships between different measures of concentration and Lerner indices, but do not take into account international competition.The first part of this paper provides a brief survey of previous theoretical work concerning the impact of foreign trade on domestic market performance, and derives a set of oligopolistic models for both homogeneous and differentiated goods in a open economy. The second part tests these models using a sample of 31 Belgian industrial sectors in 1973.Because Belgium is a small open economy, Belgian producers are unable to affect prices on international markets for homogeneous goods (assuming there are no impediments to trade). Thus Belgian firms are expected to be price-takers enjoying no market power whatever the level of concentration. There are, however, situations in which firms in a small open economy could theoretically enjoy some market power. First, if there are impediments to trade, the domestic market can be separated from the foreign market so that domestic producers are able to charge higher prices at home than given world market price (price discrimination). Second, industries manufacturing differentiated goods for which no perfect substitutes are being produced in the rest of the world face a downward-sloping demand curve.

Strategic Management: An Empirical Study of 168 Belgian Firms

(1977). Strategic Management: An Empirical Study of 168 Belgian Firms. International Studies of Management & Organization: Vol. 7, Strategy Formulation, pp. 60-75.