| Summary: | 碩士 === 輔仁大學 === 金融與國際企業學系金融碩士在職專班 === 102 === Most of previous studies discuss the determinants of bank loan default risk on Small and Medium Enterprises (SMEs) from the perspective of financial ratios or earnings management rather than cash flow transparency. However, in practice, because SMEs usually don’t have complete accounting information and those business owners may consider their own benefits including tax relief, SMEs have lower cash flow transparency in comparison to public companies, espeically on the cash flow transparency which is also one of the problems when banks considers the loan. This study employs 160 hand-collected SMEs data of a Taiwanese bank from 2011 to 2013 and investigates whether or not the cash flow transparency level affects the bank’s loan default risk. This study uses three variables of operating cash flow, financing cash flow, and fund stock as our cash flow transparency measures. The results of this study show the cash flow transparency level is negatively and significantly related to the bank loan default risk. That is the higher cash flow transparency SMEs have, the less credit risk the banks have to take. Therefore, cash flow transparency plays an important role while determining SMEs’ loan default risks of commercial banks.
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