- E-ISSN2233-5382
- KCI
E-ISSN : 2233-5382
Non-Bank Lending to Firms: Evidence from Korean Firm-Level Data
Abstract
Purpose - The purpose of this paper is to examine the determinants of non-bank depository institutions (non-bank financial corporations) lending to firms. The paper aims to contribute to the existing literature by providing empirical evidence from firm-level data and unveiling factors related to access to non-bank financial corporations by firms. Research design, data, and methodology - We used the data on borrowing by firms from CRETOP from years 2008 to 2011. Using the manufacturing industry, we examined what firm-level characteristics explained the increase in borrowing from non-bank financial corporations rather than the banks. Results - Analyzing the firm-level data from 2008 to 2011, we found that firms were more likely to borrow from non-bank financial institutions as the size of the firm increases, implying that large firms have more access to non-bank financing than small and medium-sized firms. In addition, it also showed that small and medium-sized firms moved to non-bank financial corporations for loans. Conclusion - Non-bank depository institutions are not a substitute for bank lending to firms. More specifically, they replace bank lending to firms mostly for large firms rather than small and medium-sized firms. Also, collateral and other firm-level characteristics do not matter in accounting for non-bank lending to firms.
- keywords
- Non-Bank Lending, Financial Crisis, Monetary Policy, Small and Medium-sized Enterprises
Reference
Banna, H,, Ahmad, Rubi, & Koh, Eric. (2017). Determinants of Commercial Banks’ Efficiency in Bangladesh: Does Crisis Matter? Journal of Asian Finance, Economics and Business, 4(3), 19-26.
Blazy, R., & Weill, L. (2013). Why do banks ask for collateral in SME lending? Why do banks ask for collateral in SME lending? Applied Financial Economics. 23(13), 1109-1122
Clarke, G., Cull, R., Maria S. M. P., & Sánchez, S. (2005). Bank Lending to Small Businesses in Latin America: Does Bank Origin Matter? Journal of Money, Credit and Banking, 37(1), 83-118
Cottarelli, C., Ferri, G., & Generale, A. (1995). Bank Lending Rates and Financial Structure in Italy: A Case Study. Staff Papers (International Monetary Fund), 42(3), 670-700.
Ferrarini, B., Hinojales, M., & Scaramozzino, P. (2017). Chinese Corporate Leverage Determinants. Journal of Asian Finance Economics and Business, 4(1), 5-18.
Ivashina, V., & Scharfstein, D. (2010). Bank Lending during the Financial Crisis of 2008. Journal of Financial Economics. 97(3), 319 -338.
Jung, H., & Kim, D. (2015). Bank Funding Structure and Lending under Liquidity Shocks: Evidence from Korea. Pacific-Basin Finance Journal. 33, 62 -80.
Kamil, H., & Rai, K. (2013). Global Deleveraging and Foreign Banks' Lending to Latin American Countries. Economía, 13(2), 1-29.
Kandrac, J. (2012). Monetary Policy and Bank Lending to Small Firms. Journal of Macroeconomics. 34(3), 741-748.
Lee, M. (2018). Do Firm and Bank Level Characteristics Matter for Lending to Firms during the Financial Crisis? Journal of Industrial Distribution & Business. 9(5), 37-46.
IMF (2016). Global Financial Stability Report, October 2016: Fostering Stability in a Low-Growth, Low-Rate Era.
Yin, W., & Liu, X. (2017). Bank versus Nonbank Financial Institution Lending Behaviour: Indictors of Firm size, Risk or Ownership? Applied Economics Letters. 24(18), 1285-1288.
- Downloaded
- Viewed
- 0KCI Citations
- 0WOS Citations