Bank-firm Relationship before the Firm Becomes Financially Distressed

• Main Authors: Hsiao-Tien Hsieh, 謝孝典
• Other Authors: Hsiang-Ping Tsai
• Format: Others
• Language: en_US
• Published: 2009
• Online Access: http://ndltd.ncl.edu.tw/handle/42489395423733995549

碩士 === 元智大學 === 財務金融學系 === 97 === This study analyzes changes of bank loans to financially distressed firms up to five years prior to the distress. Using data of 234 financially distressed firms in Taiwan from 1992 to 2007, we examine the changing amount of bank loans before the financial distress news declared to the public. The results indicate that firms with more banking relationships are more likely to receive additional funds from its lending banks. Furthermore, banks that have larger amount of existing loans to the problem firms are more likely to provide additional funds.