A Question of Loyalty: Bank-Firm Relationships in Taiwan

Chih-Yung Wang, Hsiang-Lin Cheng and Ya-Huei Chang

Emerging Markets Finance and Trade, 2012, vol. 48, issue S3, 190-201

Abstract: This paper explores the benefits and negative elements of the relationship between firms and their primary banking partners. The benefits of this relationship often lead firms to develop a closer relationship with their primary banking partners, while the negative elements often result in firms changing their banking partners. Our results show that larger, older firms in Taiwan are more likely to build close relationships with their banks. In addition, the duration of the relationship between firms and banks is related to the positive likelihood that firms will look for alternative banking partners.

Keywords: duration of relationship; main bank; switching (search for similar items in EconPapers)
Date: 2012
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