Financing firms: Beyond the dichotomy between banks and markets

Abstract

This article provides a review of the different streams of literature that have contributed, since the seminal work by Alexander Gerschenkron, to the issue on firms’ financing. We show that, although the traditional dichotomy between bank and stock market is out of date, the Gerschenkronian thesis is still debated. We find that many microeconomic issues have yet to be explored. In particular, the interaction between bank and stock market in financing firms merits further attention. Finally, we show that the combinations of several approaches and the use of new techniques, such as the network analysis, can contribute to provide further results on this topic.