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Why Do Firms Switch Their Main Bank? - theory and evidence from Ukraine

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Author Info
Stephan, Andreas () (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology)
Tsapin, Andriy () (European University Viadrina)
Talavera, Oleksandr (Aberdeen Business School)

Additional information is available for the following registered author(s):

Abstract

We examine why firms change their main bank and how this affects loans, interest payments and firm performance after switching. Using unique firm-bank matched Ukrainian data, the treatment effect estimates suggest that more transparent and riskier companies are more likely to switch their main bank. Importantly,main bank power, measured by equity holdings, appears to be one of the main drivers of firm switching behavior. Furthermore, we find that firms have lower performance after changing their main bank as they have to contend with higher interest payments.

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Publisher Info
Paper provided by Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies in its series Working Paper Series in Economics and Institutions of Innovation with number 180.

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Length: 29 pages
Date of creation: 04 Jun 2009
Date of revision:
Handle: RePEc:hhs:cesisp:0180

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Postal: CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology, SE-100 44 Stockholm, Sweden
Phone: +46 8 790 95 63
Web page: http://www.infra.kth.se/cesis/
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Related research
Keywords: financial constraints; switching; main bank power; firm performance; Ukraine;

Other versions of this item:

Find related papers by JEL classification:
G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Mortgages
G30 - Financial Economics - - Corporate Finance and Governance - - - General
G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure

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References listed on IDEAS
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    Other versions:
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  7. Stephan, Andreas & Talavera, Oleksandr & Tsapin, Andriy, 2008. "Corporate Debt Maturity Choice in Transition Financial Markets," Working Paper Series in Economics and Institutions of Innovation 125, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies. [Downloadable!]
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