Corporate Valuation and the Resolution of Bank Insolvency in East Asia

@article{Djankov2000CorporateVA,
  title={Corporate Valuation and the Resolution of Bank Insolvency in East Asia},
  author={Simeon Djankov and J. Jindra and Leora Klapper},
  journal={Journal of Banking and Finance},
  year={2000},
  volume={29},
  pages={2095-2118}
}
We examine the valuation effect of a bank's insolvency on related industrial firms. Our sample includes 31 insolvent banks in Indonesia, Korea, and Thailand that serve as main creditors for 269 publicly traded companies. Our findings suggest that a bank relationship adds value to a firm, and that investor confidence in bank-related firms depends on investors' certainty in the continuity of the banking relationship. Announcement of a bank closure, preceding liquidation and resulting in a… Expand
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