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The value of durable bank relationships : Evidence from Korean banking shocks

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  • The value of durable bank relationships
  • Bae, Kee-Hong; Kang, Jun-Koo; Lim, Chan-Woo
  • Elsevier


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Title The value of durable bank relationships
Similar Titles
Sub Title

Evidence from Korean banking shocks

Material Type Articles
Author(English)

Bae, Kee-Hong; Kang, Jun-Koo; Lim, Chan-Woo

Publisher

[Amsterdam, Netherlands]:Elsevier

Date 2000-11
Journal Title; Vol./Issue Journal of Financial Economics:
Pages 46
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Economic Administration
Economy < Economic System
Holding SSRN

Abstract

Using a large sample of exogenous events that negatively affected Korean banks during the 1997-1998 period, we examine the value of durable bank relationships in Korea. We show that adverse shocks to banks have a negative effect not only on the value of the banks themselves, but also on the value of their client firms, and that this adverse effect on firm value is a decreasing function of the financial health of both banks and client firms. Our results are concentrated in the second half of the sample period, when banks experienced severe difficulties.