Bank Loans with Chinese Characteristics : Some Evidence on Inside Debt in a State-Controlled Banking System

@inproceedings{Bailey2010BankLW,
  title={Bank Loans with Chinese Characteristics : Some Evidence on Inside Debt in a State-Controlled Banking System},
  author={Warren Bailey and Wei Huang and Zhishu Yang},
  year={2010}
}
We study a transitional economy where state-controlled banks make loan decisions based on noisy inside information on prospective borrowers, and may lend to avert unemployment and social instability. In China, poor financial performance and high managerial expenses increase the likelihood of obtaining a bank loan, and bank loan approval predicts poor subsequent borrower performance. Negative event-study responses occur at bank loan announcements, particularly for borrowers measuring poorly on… CONTINUE READING
Highly Cited
This paper has 28 citations. REVIEW CITATIONS

References

Publications referenced by this paper.
Showing 1-10 of 23 references

The Contradiction in China’s Gradualist Reforms.

  • W. Dobson, A. K. Kashyap
  • 2006
Highly Influential
3 Excerpts

Tunneling through Inter-corporate Loans: the China Experience.

  • C. Lee, H. Yue
  • Review of Accounting Studies,
  • 2010

Garfinkel. Frequent Issuers' Influence on Long-Run Post-Issuance Returns.

  • Billett, T M., M. J. Flannery, A J.
  • 2008

How Does the Grabbing Hand Grab? Tunneling Assets from Chinese Listed Companies to the State.

  • Cheung, L S.Y., P. R. Rau, S. Aris
  • 2006

Guanxi, Political Connections, and Expropriation: The Dark Side of State Ownership in Chinese Listed Companies.

  • Cheung, L S.Y., L. Jing, P. R. Rau, S. Aris
  • 2005

Political Control and Performance in China’s Listed Firms.

  • C E., S. Wong
  • Quarterly Journal of Economics,
  • 2005

Similar Papers

Loading similar papers…