What Causes Chinese Listed Firms To Switch Bank Loan Provider? Evidence From A Survival Analysis

Jiayi Huang (), Kent Matthews and Peng Zhou
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Jiayi Huang: Cardiff Business School

No E2019/14, Cardiff Economics Working Papers from Cardiff University, Cardiff Business School, Economics Section

Abstract: This paper analyses the duration of firm-bank relationships and examines what drives firms in China to change from one bank loan provider to another. Matched data of firm-loan-duration to bank provides a unique panel data set of relationship between China's listed firms and their lending banks consisting of 2,102 firms listed on both the Shanghai Stock Exchange and Shenzhen Stock Exchange in the period of 1996-2016. The Cox proportional hazard model is used to allow for a semiparametric hazard function after parametrically controlling for firm specific financial factors, industry factors, ownership characteristics, internal management changes, and external macroeconomic changes. In addition, we explore the impact of the 2008 financial crisis, bank-financial and ownership characteristics. The main finding of this study is that in an environment of growing ommercialisation of relationships the firm-bank relationship between state-owned enterprises (SOEs) and state-owned banks (SOBs) in China remains super-stable. However, a change in the CEO of a firm even of a SOE increases the probability of the loan-provider being changed.

Keywords: Firm-Bank Switch; China; Survival analysis; Hazard Function (search for similar items in EconPapers)
JEL-codes: D22 G21 G41 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2019-05
New Economics Papers: this item is included in nep-ban, nep-cfn, nep-cna and nep-tra
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Journal Article: What causes Chinese listed firms to switch bank loan provider? Evidence from a survival analysis (2020)
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