Collective Relationship Banking and Private Information Monitoring in Korea

Yoonhee Chang

No 2006-02, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: The structure of conglomerates embedded in the strong vertical ownership network in East Asia was believed to be a driving force for the economic success but was also blamed for the recent financial crisis in Asia given the fallacy – too big to collapse. This paper introduces a notion of collective relationship banking (CRB) as a mechanism for monitoring private information and investigates the likelihood of such banking relationship when the borrowing firms have heterogeneous vertical ownership structure using a Korean firm level panel dataset. Policy concerns are then addressed since the post-crisis corporate restructuring may create a more concentrated banking relationship with a few dominant banks.

Keywords: Collective Relationship Banking; Vertical Ownership; Information Monitoring; Relation-Based Governance (search for similar items in EconPapers)
JEL-codes: G21 G28 L13 L59 (search for similar items in EconPapers)
Date: 2006-10-01
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Collective Relationship Banking and Private Information Monitoring in Korea (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:uea:ueaccp:2006_02

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