Portfolio Behaviour of Large Manufacturing Firms

During the past ten to fifteen years large manufacturing firms have increasingly entered the field of financial intermediation. This tendency can also be observed in Austria. Between 1973 and 1988 the share of financial assets in total assets held by these firms more than doubled. Large firms invested their money mainly in the form of fixed-interest bonds. The major reasons for the growing financial activities of industrial firms are the high interest yields of financial investments, increasing uncertainty about the economy's prospects during the eighties, and a tendency towards increasing management control of these firms.