Abstract
This paper analyzed the impacts of global banks(foreign banks) on the size of related firms using South Korean data. We analyzed the difference of firm size between the main relationship with foreign banks and the main relationship with domestic banks. According to this paper, foreign banks prefer to have a main relationship with the larger sized firms in Korea.
The preferred firm size by foreign main banks is larger than that by domestic main banks. Foreign banks prefer to lend to the larger firms in order to solve the problems stemming from asymmetric information between firms and banks and to avoid the loan default risk from the smaller firms.
The entry or increase of foreign banks improve the fund raising environments of larger firms but decrease the chances of loans for the smaller firms. This paper is expected to suggest new evidences on the preceding literature of foreign banks as well as new insight to policy-makers
The preferred firm size by foreign main banks is larger than that by domestic main banks. Foreign banks prefer to lend to the larger firms in order to solve the problems stemming from asymmetric information between firms and banks and to avoid the loan default risk from the smaller firms.
The entry or increase of foreign banks improve the fund raising environments of larger firms but decrease the chances of loans for the smaller firms. This paper is expected to suggest new evidences on the preceding literature of foreign banks as well as new insight to policy-makers
| Translated title of the contribution | Globalized Banks and Firm Size of Local country: Focused on the Korean Market |
|---|---|
| Original language | Korean |
| Pages (from-to) | 119-141 |
| Number of pages | 23 |
| Journal | 국제지역연구 |
| Volume | 17 |
| Issue number | 3 |
| State | Published - Sep 2013 |