Bank-Firm Relationship and Sof Budget Constraing in Emerging Economies

2017 Fiscal Year Final Research Report

• Project/Area Number: 15K03550
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Research Field: Money/ Finance
• Research Institution: Seikei University
• Principal Investigator: Nagano Mamoru 成蹊大学, 経済学部, 教授 (20508858)
• Project Period (FY): 2015-04-01 – 2018-03-31
• Keywords: 銀行―企業関係 / 新興国 / 市場経済化 / 経済発展 / コーポレートガバナンス

Outline of Final Research Achievements

We analyze the lending relationships between 1,011 banks and 17,284 client borrowers across 11 emerging economies. We first demonstrate a state-owned bank’s risk appetite increases as its number of family business group-owned borrowing partners increases. Second, we show that a non-financial firm-owned bank’s risk appetite also increases as its number of family business group-owned borrowing partners increases. Finally, we show that a bank is more likely to reduce its risk appetite and improve its operational cost efficiency as its foreign ownership ratio increases, regardless of the bank’s lending partner. These findings suggest that, in the post-privatization period, the ownership structure changes of banks and/or borrowers affects the lending relationship and the bank’s risk appetite and cost efficiency as a result.

Free Research Field

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