:1.7_')
tWO sources will be used by family finns.
They_ there_bre_ would not
have any incentive to go l_ublie,
We nB.Vconclude that the m_ny con_le._d:ties _
t_e fi_ncial
market
are partly caused by ?egulatic_s _(l Darkly ]_7c_ide_developme2at and imperfections.
These _ive _ise to a multiplici_j of _rket
oppor<unities
for financial and non-financial investment that differ among _ups decision-makers.
of
It is not easy to document these cxgmpl_dt__es. 0up
analysis of flow of 5unds in the ne:_tsection helps a little in understand/rigthe financial decisions n_de by the diffem_mt ixits,
8.
Co_,norateFinance 1950-._,976
Corporate sources are s_rized in Table 8.3.
fr_
the diffement F0F data
Corpom..ate saving _a.._ _ _ a very _ ir,_po_,t_z_'t solmce of corporate
finance in "theear)y stages of _,zth amounting to 44 percent.
_
_Ti-th its s_z,e in total sources
size c_qdthe nu_be3rof firthsincreased in the
process of industria._;zation,dem_id fo_ exter1%_lfunds 5increasedalso.
This
was met by supply from the eXpandin[_financial syste_nespecially banks and by other _/_nesof cme_iit. _a_-s,we see the downward trend in the contribution of savin_ in total corpomate finance from 44 pereeantto a1._ut1_.percent in 197t_-76. ..The downward tr._d was broken /m 1972 and 1973 when p_ofits rose increasing savings,
hhile total liabilities were increasing., in /mportance_
credit generated by the financial syste_nseemed not to have increased as a Dropo_tion of total liabilities. starting-at fou/__2ce_t in 1974-76. source.
Trade credit increased _ather sharply
of total sources in 195!-55 and reaching 28 percent
All private spe/%dingunit% including household% used this
For the colas?ate secto_,_ trade credit bec_rn_e as important as loans
as a source of funds in the 70_.