Bank Loans with Chinese Characteristics
We examine stock price responses to announcements of bank loans in China’s rapidly evolving economy. While research on the U.S. and other developed countries shows a positive stock price reaction when a borrower is approved for a bank loan, we find a significantly negative bank loan announcement effect on stock prices of Chinese borrowers. This negative announcement effect is particularly pronounced for borrowers that use loans to repay existing debt. Chinese corporate borrowers typically display increased related party transactions after obtaining bank loans. Furthermore, the receipt of a bank loan predicts subsequent poor performance. Our evidence is consistent with the limited alternatives for raising capital in China and the political goals that the Chinese Banking system serves.
Warren Bailey Wei Huang Zhishu Yang
Johnson Graduate School of Management, Cornell University, Sage Hall, Ithaca, NY 14853-6201, U.S.A. Shidler College of Business, University of Hawaii at Manoa, 2404 Maile Way, Honolulu, HI 96822, U.S. School of Economics and Management, Tsinghua University, Beijing, 100084, China
国际会议
成都
英文
1-36
2007-07-09（万方平台首次上网日期，不代表论文的发表时间）