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Interbank Relations, Environmental Uncertainty, and Corporate Credit Access in China

Burzynska, Katarzyna LU and Opper, Sonja LU (2020) In Management and Organization Review 16(3). p.595-628
Abstract

We hypothesize that informal bank networks influence corporate credit access in China. Our sample comprises a panel of 515 corporations listed on China's stock exchanges with a total of 1,052 firm-year observations, holding a total of 7,009 major bank loans from 183 distinct banks between 2007 and 2012. Results support the hypothesis that closure in bank networks facilitates credit access. We further show that the positive closure-performance association offers fewer advantages if financial markets and the legal infrastructure are relatively well developed. Our findings contribute to an emergent literature examining how informal networks can productively substitute weak formal institutions, and how the interplay between informal... (More)

We hypothesize that informal bank networks influence corporate credit access in China. Our sample comprises a panel of 515 corporations listed on China's stock exchanges with a total of 1,052 firm-year observations, holding a total of 7,009 major bank loans from 183 distinct banks between 2007 and 2012. Results support the hypothesis that closure in bank networks facilitates credit access. We further show that the positive closure-performance association offers fewer advantages if financial markets and the legal infrastructure are relatively well developed. Our findings contribute to an emergent literature examining how informal networks can productively substitute weak formal institutions, and how the interplay between informal networks and network embeddedness shapes individual and corporate strategies.

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Please use this url to cite or link to this publication:
author
and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
banks, cross-ownership, environmental uncertainty, lending, network structure, trust
in
Management and Organization Review
volume
16
issue
3
pages
34 pages
publisher
Cambridge University Press
external identifiers
  • scopus:85090554271
ISSN
1740-8776
DOI
10.1017/mor.2020.25
language
English
LU publication?
yes
id
b53ba48d-5bb3-405d-a631-f782480bc5be
date added to LUP
2020-10-22 15:27:59
date last changed
2022-04-19 01:21:31
@article{b53ba48d-5bb3-405d-a631-f782480bc5be,
  abstract     = {{<p>We hypothesize that informal bank networks influence corporate credit access in China. Our sample comprises a panel of 515 corporations listed on China's stock exchanges with a total of 1,052 firm-year observations, holding a total of 7,009 major bank loans from 183 distinct banks between 2007 and 2012. Results support the hypothesis that closure in bank networks facilitates credit access. We further show that the positive closure-performance association offers fewer advantages if financial markets and the legal infrastructure are relatively well developed. Our findings contribute to an emergent literature examining how informal networks can productively substitute weak formal institutions, and how the interplay between informal networks and network embeddedness shapes individual and corporate strategies. </p>}},
  author       = {{Burzynska, Katarzyna and Opper, Sonja}},
  issn         = {{1740-8776}},
  keywords     = {{banks; cross-ownership; environmental uncertainty; lending; network structure; trust}},
  language     = {{eng}},
  month        = {{07}},
  number       = {{3}},
  pages        = {{595--628}},
  publisher    = {{Cambridge University Press}},
  series       = {{Management and Organization Review}},
  title        = {{Interbank Relations, Environmental Uncertainty, and Corporate Credit Access in China}},
  url          = {{http://dx.doi.org/10.1017/mor.2020.25}},
  doi          = {{10.1017/mor.2020.25}},
  volume       = {{16}},
  year         = {{2020}},
}