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Bank Relationships and Their effects on Firm Performance Around the Asian Financial Crisis: Evidence from Taiwan

Year: 2004

Type: article

Abstract: We evaluate the impact of bank relationships on firm performance for a sample of Taiwanese firms around the 1997 Asian financial crisis. We find a negative relation between the number of domestic-bank relationships and firm performance, but a positive relation between the number of foreign-bank relationships and firm performance. Firms explored new relationships with domestic banks and reduced their reliance on foreign banks during the crisis. Lending bank reputation and bank loan ratios are important factors explaining firm performance. Factors that affect banking relationships include borrowing firms' profitability, age, size, and leverage, and the primary lending bank's characteristics.

Source: Financial Management

Authors: Robert C.W. Fok, Yuanchen Chang, Wan-Tuz Lee

Institutions: University of Wisconsin–Parkside, National Chung Hsing University, Lancaster University, National Chung Cheng University

Language: English

Topic: Corporate Finance and Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W1551039650

FWCI: 6.498

Cites: 9

Cited by: 51

Related to: 10