Ownership, financial strategy and performance

The Lancashire cotton textile industry, 1918–1938

Datos Bibliográficos

ID8420198
AutoresDavid M Higgins (0000-0002-6885-266X, Newcastle University), David Higgins (0000-0001-8136-6466, Newcastle University Business School, University of Newcastle, Newcastle upon Tyne, UK), Steven Toms (0000-0002-6147-7828, Leeds University Business School, University of Leeds, Leeds, UK), Steven A Toms (0000-0001-8732-0522, University of Leeds, autor de correspondencia), Igor Filatotchev (0000-0003-4291-7768, Cass Business School, City University London, London, UK)
Año2015
Volumen57
Número1
Páginas97-121
Fecha de publicación2015-01-02
Peer ReviewedSí
Open AccessNo
TipoARTICLE
RevistaBusiness History (JOURNAL)
Identificadores de la revistaISSN: 0007-6791 • E-ISSN: 1743-7938
EditorialInforma UK Limited (PUBLISHER • GB)
DOI10.1080/00076791.2014.977873
OpenAlexW2132128987
IdiomaEN
Citas recibidas3
Referencias citadas29

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 ownerhip groups. On the basis of this review the article develops hypotheses to suggest alternatives to the view that bank debt was the dominant explantion 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

Business · Corporate governance · Debt · Dividend · Economics · Equity (law · Financial system · Market economy · Restructuring · Shareholder · Corporate Finance and Governance · Finance