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How Banks in China make Lending Decisions.
- Source :
-
Journal of Contemporary China . Mar2009, Vol. 18 Issue 59, p285-302. 18p. 1 Chart. - Publication Year :
- 2009
-
Abstract
- Based on interviews conducted in four major Chinese cities, this paper examines the determinants of lending by state-owned commercial banks (SOCBs) to manufacturing firms in China. The conventional relationship banking and transaction lending theories helps explain at least part of the lender-borrower relationship in China. The perceived lending bias against non-state-owned enterprises could actually be reconciled as rational decision-making by SOCBs, partly due to the higher risk involved and/or high transaction costs in the risk evaluation of such lending. The existence of unofficial lending criteria at SOCBs nonetheless provides golden rent-seeking opportunities for unscrupulous bankers to exploit the regulatory loopholes for financial gain. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 10670564
- Volume :
- 18
- Issue :
- 59
- Database :
- Academic Search Index
- Journal :
- Journal of Contemporary China
- Publication Type :
- Academic Journal
- Accession number :
- 36232510
- Full Text :
- https://doi.org/10.1080/10670560802576034