Collective relationship banking and private information monitoring in Korea

Yoonhee Tina Chang ()

The Economics of Transition, 2007, vol. 15, pages 483-504

Abstract: This paper introduces the notion of collective relationship banking (CRB) as a mechanism for monitoring private information and characterizes the probability of such a banking relationship existing when the borrowing firms have heterogeneous vertical ownership structures. Using a Korean firm-level panel dataset, the empirical results of the paper suggest that firms with smaller holding companies' ownership stakes are more likely to choose CRB. This can be explained in terms of CRB as a means to overcome informational asymmetries as holding companies can provide indirect monitoring. The paper then addresses policy concerns associated with corporate restructuring which may create a more concentrated banking relationship with a few dominant banks. Copyright (c) 2007 The Author
Journal compilation (c) 2007 The European Bank for Reconstruction and Development. .

Date: 2007

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0351.2007.00296.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Collective Relationship Banking and Private Information Monitoring in Korea (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bla:etrans:v:15:y:2007:i::p:483-504

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0967-0750

Access Statistics for this article

The Economics of Transition is edited by Philippe Aghion and Wendy Carlin

More articles in The Economics of Transition from The European Bank for Reconstruction and Development
Series data maintained by Christopher F. Baum ().