Do Banks Provide "Price-Supporting" or "Loan-Supporting" in Financial Distressed Companies? Evidence from Taiwan

• Main Authors: Huei-Ye Jhu, 朱慧曄
• Other Authors: Li-Wen Chen
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/07410425165785151907

碩士 === 國立暨南國際大學 === 財務金融學系 === 96 === This study investigates whether banks being directors, supervisors, or blockholders in financial distressed companies provide price-supporting or loan-supporting effects. We find that after the financial distressed announcement, banks’ shareholdings, excess turnover ratios, and cumulative abnormal returns increase for those financial distressed companies with banks being directors, supervisors, or blockholders. This evidence is consistent with the price-supporting effect. Furthermore, the magnitude of price-supporting effect is strongest when banks are also directors while the magnitude is weakest when banks are also blockholders. Besides, consistent with the loan-supporting effect, the loan terms become more favorable after the event date. However, the loan terms for financial distressed companies with banks being directors, supervisors, or blockholders are more adverse than those without banks being directors, supervisor, or blockholders.