Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5091505 | Journal of Banking & Finance | 2005 | 24 Pages |
Abstract
We examine the valuation effect of the resolution of a bank's insolvency on commercial clients. Our sample includes 29 insolvent banks in Indonesia, Korea, and Thailand that serve as main creditors for 269 publicly traded companies. Our findings suggest that a bank relationship adds value to a firm, and that this value depends on investors' certainty in the continuity of the banking relationship. Significant cumulative returns for 50 days following the event date suggest that the type of resolution has real effects on the performance of related firms above initial expectations.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Simeon Djankov, Jan Jindra, Leora F. Klapper,