How Firms Shape Their Bank Pools in Corrupt Environments: A Theoretical and Empirical Investigation in Vietnam

66 Pages Posted: 5 Feb 2018

See all articles by Frederic Lobez

Frederic Lobez

University of Lille II - GERME Research Center

Jean-Christophe Statnik

University of Lille II - University of Lille LSMRC & ISA

Vu Hong Van

University of Lille II - University of Lille LSMRC & ISA

Date Written: January 17, 2018

Abstract

This study analyzes the structure of firms' bank pools in emerging economies characterized by corruption. In the proposed theoretical model, firm managers maximize an expected utility function that depends on both firm value and personal consumption. According to the weight they assign to each component, managers choose among three bank pool structures to combine some number of banks and the choice of a main bank that is more or less corrupt. The test of this model relies on a rich data set from Vietnamese firms. The results confirm that firms and banks match, in terms of their levels of integrity. Moreover, firms tend to increase the number of banks in the bank pool when they cannot achieve a relationship with a desirable main bank.

Keywords: Firm bank pool structure, Managerial ethics, Corruption, Banks

JEL Classification: G30, G32

Suggested Citation

Lobez, Frederic and Statnik, Jean-Christophe and Van, Vu Hong, How Firms Shape Their Bank Pools in Corrupt Environments: A Theoretical and Empirical Investigation in Vietnam (January 17, 2018). Available at SSRN: https://ssrn.com/abstract=3103765 or http://dx.doi.org/10.2139/ssrn.3103765

Frederic Lobez

University of Lille II - GERME Research Center ( email )

1, Place Deliote BP 381
Lille, 59000
France
03 20 99 74 75 (Phone)
03-20-90-77-02 (Fax)

Jean-Christophe Statnik (Contact Author)

University of Lille II - University of Lille LSMRC & ISA ( email )

1, rue de Mulhouse
Lille, 59000
France

Vu Hong Van

University of Lille II - University of Lille LSMRC & ISA

1, rue de Mulhouse
Lille, 59000
France

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