Abstract

http://ssrn.com/abstract=1359627
 
 

References (33)



 


 



Information from Relationship Lending: Evidence from Loan Defaults in China


Chun Chang


Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF)

Guanmin Liao


Central University of Finance and Economics - School of Accountancy

Xiaoyun Yu


Indiana University - Kelley School of Business - Department of Finance; China Academy of Financial Research (CAFR)

Zheng Ni


Renmin University of China - Hanqing Advanced Institute of Economics and Finance

June 24, 2013

Journal of Money, Credit, and Banking, Forthcoming
European Banking Center Discussion Paper No. 2009-10S
CentER Discussion Paper Series No. 2009-39S

Abstract:     
Using a proprietary database from a large Chinese state-owned bank, we examine whether information evolved from banking relationships predicts commercial loan default by industrial firms. We find that the bank’s relationship information is significantly linked to the incidence of default, and that its contribution to prediction accuracy is larger than any hard information. Furthermore, the effect of relationship information is stronger among firms that have a more sustained banking relationship. Our findings indicate that, at least in the emerging markets, a bank’s relationship information still matters for large firms, despite that fact that hard information for such firms is abundant.

Number of Pages in PDF File: 86

Keywords: Debt default, internal credit ratings, credit risk, relationship lending, soft information

JEL Classification: G21, D81, D82, D83, F34

Accepted Paper Series


Download This Paper

Date posted: March 15, 2009 ; Last revised: May 14, 2014

Suggested Citation

Chang, Chun and Liao, Guanmin and Yu, Xiaoyun and Ni, Zheng, Information from Relationship Lending: Evidence from Loan Defaults in China (June 24, 2013). Journal of Money, Credit, and Banking, Forthcoming; European Banking Center Discussion Paper No. 2009-10S; CentER Discussion Paper Series No. 2009-39S. Available at SSRN: http://ssrn.com/abstract=1359627

Contact Information

Chun Chang
Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF) ( email )
Shanghai
China
Guanmin Liao
Central University of Finance and Economics - School of Accountancy ( email )
No. 39, South College Road, Haidian District
Beijing, 100081
China
Xiaoyun Yu (Contact Author)
Indiana University - Kelley School of Business - Department of Finance ( email )
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3521 (Phone)
812-855-5875 (Fax)

China Academy of Financial Research (CAFR)
1954 Huashan Road
Shanghai P.R.China, 200030
China

Zheng Ni
Renmin University of China - Hanqing Advanced Institute of Economics and Finance ( email )
Room B906
Xianjin Building
Beijing, Beijing 100872
China
Feedback to SSRN


Paper statistics
Abstract Views: 1,703
Downloads: 438
Download Rank: 32,299
References:  33

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.313 seconds