Investment Banking and Security Market Development: Does Finance Follow Industry?

By Bharat Narendra Anand, Alexander Galetovic P.

July 1, 2001

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Format: Chicago

Bharat Narendra Anand, and Alexander Galetovic P. Investment Banking and Security Market Development: Does Finance Follow Industry?, (USA: International Monetary Fund, 2001) accessed November 12, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Long-term relationships between business firms and investment banks are pervasive in developed security markets and there is evidence that better monitoring and information result from these relationships. Therefore, security markets should allocate resources better when an investment banking industry exists. We study the necessary conditions for the emergence of sustainable relationships and explore whether policy can foster them. We show that policy can help alleviate the costs of relationships, but an investment banking industry will not emerge with only a small number of large firms.

Subject: Banking, Business enterprises, Commercial banks, Competition, Economic sectors, Financial institutions, Financial markets, Financial services, Investment banking, Securities markets

Keywords: Business enterprises, Commercial banks, Competition, Firm-commitment contract, Firm-investment bank relationship, Global, High-volume firm, Investment banking, Investment banking industry, Low-volume firm, Relationships, Securities markets, Size distribution of firms, Telecomm company CTC, WP

Publication Details

Pages:

26
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2001/090
Stock No:

WPIEA0902001
ISBN:

9781451851397
ISSN:

1018-5941

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