Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230448
Authors: 
Huang, Jiayi
Matthews, Kent
Zhou, Peng
Year of Publication: 
2019
Series/Report no.: 
Cardiff Economics Working Papers No. E2019/14
Abstract: 
This paper analyses the duration of firm-bank relationships and examines what drives firms in China to change from one bank loan provider to another. Matched data of firm-loan-duration to bank provides a unique panel data set of relationship between China's listed firms and their lending banks consisting of 2,102 firms listed on both the Shanghai Stock Exchange and Shenzhen Stock Exchange in the period of 1996-2016. The Cox proportional hazard model is used to allow for a semiparametric hazard function after parametrically controlling for firmspecific financial factors, industry factors, ownership characteristics, internal management changes, and external macroeconomic changes. In addition, we explore the impact of the 2008 financial crisis, bank-financial and ownership characteristics. The main finding of this study is that in an environment of growing commercialisation of relationships the firm-bank relationship between state-owned enterprises (SOEs) and state-owned banks (SOBs) in China remains super-stable. However, a change in the CEO of a firm even of a SOE increases the probability of the loan-provider being changed.
Subjects: 
Firm-Bank Switch
China
Survival analysis
Hazard Function
JEL: 
G21
D22
G41
Document Type: 
Working Paper

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