Why do firms switch banks? Evidence from China

Wei Yin and Kent Matthews

No E2014/17, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: This paper uses a sample of matched data of firms-banks in China over the period 1999-2012 to determine the drivers of firms switching behaviour from one bank relationship to another. The findings conform to the extant literature and therefore indicate that the switching behaviour of Chinese firms is no different to firms elsewhere. The results show that the principal driver of a switching action is the credit needs of the firm and a mixture of firm and bank characteristics. The findings support the extant literature that less opaque firms are able to switch more readily than opaque firms. The results also suggest that banks that develop there fee income services are more effective in locking-in their borrowers.

Keywords: Switching behaviour; Chinese firms; Chinese banks (search for similar items in EconPapers)
JEL-codes: G21 L22 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2014-09
New Economics Papers: this item is included in nep-ban, nep-bec, nep-cfn and nep-tra
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Related works:
Journal Article: Why Do Firms Switch Banks? Evidence from China (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cdf:wpaper:2014/17

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