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Start Over Descriptor "BANK CREDIT" Publisher emerald publishing limited
15 results on '"BANK CREDIT"'

13. Informal finance, trade credit and private firm performance.

Author

Su, Jun and Sun, Yuefan

Abstract

Purpose – The purpose of this paper is to test the effect of informal finance and trade credit on the performance of private firms. Design/methodology/approach – Based on a survey to private firms in 19 cities, the paper empirically tests the promoting effects of informal finance and trade credit on the performance of private firms in China. Findings – It was found that informal finance and trade credit have positive effects on private firms' performance measured by ROA. The net income reinvestment rate of private firms is positively related to whether or not the firm adopts informal financing or trade credit financing. A private firm having limited access to formal finance is more inclined to rely on self-funds and is more limited by financing choices. Informal financing and trade credit can relieve the tension of cash flow chain but cannot solve the financing constraints. The empirical results also show that bank credit is still not the main financing choice for private firms and has not yet played a promoting role in private firms' performance and growth. Informal finance is more important to promote performance in manufacturing industry, while trade credit is more effective in wholesale and trading industry. The results show the coexistence viability of informal financing channels and formal financial institutions in China. Practical implications – The policy implication is the Chinese Government should take careful steps to regulate informal financing sources. Originality/value – After some theoretical literature, such as Lin and Sun, this paper explores for the first time the effect of informal financing channels on the performance of private firms. [ABSTRACT FROM AUTHOR]

Published
2011
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14. Do Unsolicited Bank Credit Ratings Matter to Bank Leverage Decision? Evidence from Asian Countries

Author

Yu-Jen Hsiao, Yueh-Lung Lin, and Lei Qin

Subjects
Credit rating, Bank credit, Leverage (finance), Debt, media_common.quotation_subject, Equity (finance), Asian country, Financial system, Business, media_common
Abstract

This chapter differentiates the effect of solicited credit ratings (SCRs) and unsolicited credit ratings (UCRs) on bank leverage decision before and after the credit rating change. We find that banks with UCRs issue less debt relative to equity when the credit rating changes are approaching. Such findings are also prominent when bank credit rating moves from investment grade to speculative grade. After credit rating upgrades (downgrades), banks with unsolicited (solicited) credit ratings are inclined to issue more (less) debt relative to equity than those with solicited (unsolicited) credit ratings. We conclude that SCR and UCR changes lead to significantly different effects on bank leverage decision.

Published
2019

15. Credit Crunch and Saving Glut in Taiwan: Empirical Evidences

Author

Lie-Jane Kao, Chiung-Min Tsai, and Cheng-Few Lee

Subjects
050208 finance, 05 social sciences, Disequilibrium, Monetary economics, Excess supply, Bank credit, Capital outflow, 0502 economics and business, Financial crisis, medicine, Bond market, Credit crunch, Business, 050207 economics, medicine.symptom, Moneyness
Abstract

The main purpose of this paper is to identify the developments for bank credit allocation in Taiwan since 1994. Using a disequilibrium model, we evaluate whether there is a situation of excess demand, that is a credit crunch, or excess supply, that is a saving glut, during these periods. We find a considerable excess demand, or credit crunch, particularly during the Asian financial crisis. The main cause of this credit crunch can be attributed to the tightening in the money market because of capital outflow. On the contrary, the empirical result also shows that there were some periods experiencing an excess supply from 2001 to 2004, or a situation of saving glut as mentioned by Bernanke (2005). Furthermore, the saving glut was still prevailing during the periods of global financial crisis. This is probably due to the aggressive and pre-empt policy actions taken by the financial and monetary authorities to avoid a possible meltdown in the credit market.

Published
2017

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