1992 Fiscal Year Final Research Report Summary

THE STRUCTURE AND BEHAVIOR OF BRITISH LARGE FIRMS

Research Project

Project/Area Number	03630045
Research Category	Grant-in-Aid for General Scientific Research (C)
Allocation Type	Single-year Grants
Research Field	Economic history
Research Institution	TOHOKU UNIVERSITY
Principal Investigator	SUZUKI Yoshitaka TOHOKU UNIVERSITY ECONOMICS PROFESSOR, 経済学部, 教授 (50004198)
Project Period (FY)	1991 – 1992
Keywords	MODERN BUSINESS ENTERPRISE / INTERNAL CAPITAL MARKET / BRITISH FIRM / HOLDING COMPANY / INSTITUTIONAL INVESTORS
Research Abstract	This research deals with the relationship between the structure and behavior of British large-scale firms and their internal capital markets. We started from a hypothesis that the structure and behavior of firms are determined by the nature of resources which these firms internalized. In the case of British firms, it has been the financial resources that played the most importnat role. Most of the large-scale British firms adopted holding company structure, which is an appropriate organisational form to control this financial resource. We were also able to distinguish two types of holding companies; one formed by the "market failure", which is typically found in the post-war samples,while the other, which internalized financial resources from the beginning, is found in the pre-war samples. Most British firms acted for the profit of their stock-holders, which is quite contrasting to their American of Japanese counterparts.