Privileged Interfirm/Bank Relationships in Central Europe: Trigger or Trap for Corporate Governance?
Peter R. Haiss
WU Vienna University of Economics and Business; UniCredit Bank Austria; IES Vienna - Institute for the International Education of Students
Lucjan T. Orlowski
Sacred Heart University - John F. Welch College of Business
Fordham University - Department of Economics
IACCM International Association for Cross Cultural Competence and Management
CASE Network Studies and Analyses No. 170
The paper focuses on the question whether banks and capital markets in Central Europe are capable of exerting a positive influence on enterprise performance at the present stage of the economic transformation. These markets are characterised by privileged, collaborative interfirm/interbank relationships demonstrated through various channels. Among them is the competition for private deposits between commercial and national banks that are simultaneously supervisors of commercial banks, as is the case in Poland. Other channels include: heavily indebted large banks that are owners of industrial companies (as is the case in Slovakia with the steel mill VSZ owning the third largest bank IRB), investment funds that are facilitating industrial restructuring, and foreign banks holding only minority stakes in large domestic financial institutions.
Number of Pages in PDF File: 32
Keywords: Interfirm, bank relationship, Central Europe
JEL Classification: P34, O16, G21, G34
Date posted: September 6, 2009 ; Last revised: February 10, 2011