Foreign bank lending and information asymmetries in China: Empirical evidence from the syndicated loan market

Pierre Pessarossi, Christophe Godlewski and Laurent Weill

Journal of Asian Economics, 2012, vol. 23, issue 4, 423-433

Abstract: This paper considers whether information asymmetries affect the willingness of foreign banks to participate in syndicated loans to corporate borrowers in China. We analyze how ownership concentration, which influences information asymmetries in the relationship between the borrower and the lender, exerts an impact on the participation of foreign banks in syndicated loans granted to Chinese borrowers in the period 2004–2009. We observe that greater ownership concentration of the borrowing firm does not positively influence participation of foreign banks in the loan syndicate. We conclude that information asymmetries are not exacerbated for foreign banks relative to local banks in China.

Keywords: Bank; Foreign investors; Information asymmetry; Loan; China (search for similar items in EconPapers)
JEL-codes: G21 P34 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:23:y:2012:i:4:p:423-433

DOI: 10.1016/j.asieco.2012.03.006

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