Earticle

초록

영어

Using a combined panel data of Chinese and Korean non-financial firms from 2000 to 2007, we study the effects of governments’ influence on the banking sector in their decision making, and other financial and non-financial traits of firms in the two countries on the borrowing behaviors of firms. We specifically test whether there are so-called soft budget constraint (SBC) problems in China, where banks are supposed to be under the guidance of the central government for the welfare of the people at the expenses of profits and efficiency of firms, compared with the case of Korea. For this, we estimate default risks of firms and compare the effects of default risks and other factors on bank financing of firms in two countries. We find that while firms in Korea known to have experienced SBC before the financial crisis occurred in late 1997 have been under hard budget constraints since year 2000, and that those in China are exposed to SBC problems. The results support our theoretical studies about the effects of reputation of lenders on SBC in a centralized and decentralized economy in toughening budget constraints. We also have found that factors affecting bank financing in China and Korea are quite different. Most strikingly, Chinese firms with better cash flows from operation obtain more bank loans, while such Korean firms resort less to bank financing. In addition, while Korean firms paying higher interest rates finance more loans from banks, while such Chinese banks finance less from banks. This might imply that for firms in Korea and China might have different sources of financing in the times of high interest rates or in the case of high risk premium asked.

목차

Abstract
 I. Introduction
 II. Literature Review
 III. Empirical Tests
  3.1 Data
  3.2 Default Models
 IV. Conclusion
 REFERENCES

키워드

저자

• Kim, Sunghwan [ Assistant Professor, School of Business, Administration, Kyungpook National University ]
• Tan, Jin [ Ph.D. Candidate, School of Business, Administration, Kyungpook National University ]

참고문헌

발행기관

간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330