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Higgins, D, Toms, JS and Filatotchev, I (2015) Ownership, financial strategy and performance: the Lancashire cotton textile industry, 1918-1938. Business History, 57 (1). pp. 97-121. ISSN 0007-6791
Abstract
This article assesses the validity of John Maynard Keynes' claim that the Lancashire cotton industry failed to restructure because the banks as debt holders prevented firms exiting the industry, creating persistent over-capacity. Using case studies from a substantial sample of Lancashire firms, the article explores archival evidence to establish their financial characteristics, to examine their equity and debt finance and the governance roles of directors and outside ownership groups. On the basis of this review the article develops hypotheses to suggest alternatives to the view that bank debt was the dominant explanation of firm level behaviour and industry failure. Applying these to a statistical dataset, results show that syndicates of local shareholders, not banks, were an important impediment to the exit of firms. Moreover, syndicates milked firms of any profits through dividends, thereby limiting reinvestment and re-equipment possibilities. Our results show that where laissez-faire fails in response to a crisis, incumbent investors, particularly block-holders, can be an important impediment to corporate restructuring.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | (c) 2015, Taylor & Francis. This is an Accepted Manuscript of an article published by Taylor & Francis in Business History on 19 Feb 2015, available online: http://dx.doi.org/10.1080/00076791.2014.977873 |
Keywords: | Keynes; cotton; banks; syndicates; corporate restructuring |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 11 Feb 2016 15:35 |
Last Modified: | 01 Nov 2016 22:25 |
Published Version: | http://dx.doi.org/10.1080/00076791.2014.977873 |
Status: | Published |
Publisher: | Taylor & Francis (Routledge): SSH Titles |
Identification Number: | 10.1080/00076791.2014.977873 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:94992 |
Available Versions of this Item
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Ownership, financial strategy and performance: the Lancashire cotton textile industry, 1918-1938. (deposited 15 Oct 2015 15:28)
- Ownership, financial strategy and performance: the Lancashire cotton textile industry, 1918-1938. (deposited 11 Feb 2016 15:35) [Currently Displayed]