The pattern of Swedish corporate finance in the 20th century

Description

This project adds to the research on the role and function of corporate finance in industrial growth and progress in Sweden during the 20th century. The financial structure of an economy is closely related to its level of development. As the financial system develops, a greater variety of financial services is made available to firms, allowing them to choose the financing strategies they consider most efficient. In the corporate finance literature, factors such as firm size and age, business orientation, cost structure (e.g. corporate tax rates), etc. are among the most frequently highlighted determinants of financing choices. However, little is currently known about how such factors have influenced the financing strategies of Swedish firms during the 20th century.

Starting from the perhaps naive but still unanswered question of i) how and why Swedish firms have chosen their sources of finance, and ii) how this has changed over time, we examine the corporate finance strategies of 300 large and small firms in Sweden between 1911 and 2000. In a second part of the project, we also examine the financing choices of start-up firms in the electrical engineering industry in the early 20th century and investigate whether different financing strategies led to different outcomes in terms of subsequent firm growth and profits.