Bank on steel? Joint-stock banks and the rationalization of the British interwar steel industry

This study investigates the impact of joint-stock banks on the rationalization of the British interwar steel industry. A new panel data set of steel firm characteristics covering 1920–1938 is used to document rationalization and bank involvement, including interlocking directorships, with both found to be more extensive than previously thought. A set of all potential amalgamation pairs is created and used in a logit analysis of the determinants of mergers. Bank involvement with firms increased the probability that a particular merger occurred. Furthermore, mergers with bank involvement differed in their impact on profitability from those without.