We investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries. At an aggregate level, firm leverage is fairly similar across the G-7 countries. We find that factors identified by previous studies as correlated in the cross-section with firm leverage in the U.S., are similarly correlated in other countries as well. However, a deeper examination of the U.S. and foreign evidence suggests that the theoretical underpinnings of the observed correlations are still largely unresolved.

Abstract: Using bank level data for 80 countries in the 1988-1995 period, this paper examines the extent of foreign ownership in national banking markets. The net interest margins, overhead, taxes paid, and profitability of foreign and domestic banks are compared. The functioning of foreign relative to domestic banks is very different in developing and developed countries, with foreign banks achieving higher (lower) profits than domestic banks in developing (developed) countries. Estimation results further suggest that an increase in the share of foreign banks leads to a lower profitability of domestic banks.

This paper reports on a detailed comparison of labour productivity in bank lending to `middle market' or `mid-corporate' business customers in Britain, the United States and Germany. It is based on data collected from matched samples of bank lending offices in the three countries. After standardising for average loan size, average lending output per employee-hour in the German sample is found to be some 23% higher than in the US and almost two thirds higher than in Britain. This productivity ranking is left undisturbed by consideration of various indicators of service quality as experienced by borrowers (for example, banks' speed of response to customers' credit requests and the extent to which banks seek to gain a detailed understanding of clients' businesses and their associated credit needs). In the US sample of lending offices, relatively high productivity in the volume-oriented low end of the market is offset by a very labour-intensive approach to servicing credit requests from l...