Arbeitspapier
Banks as corporate monitors: Evidence from CEO turnovers in China
This paper examines the governance role of banks in replacement of underperforming CEOs in firms listed on Chinese stock exchanges. Under most circumstances, the findings suggest that the presence of outstanding loans does not increase the probability that a poorly performing CEO will be forced out and replaced. However, there is a positive and significant effect if the under-performing firm relies heavily on secured and short-term bank lending. Bank loans increase the likelihood of a forced CEO turnover in private firms, especially where joint-equity banks serve as the main lenders to the firm. There is no similar increase in the probability of a CEO turnover for state-owned firms or firms that borrow mainly from state-owned banks. Thus, where state ownership of banks and listed firms implies inefficiency or reluctance on monitoring borrower performance, there is an opportunity to improve loan contract arrangements to improve the mon-itoring role of lending banks.
- ISBN
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978-952-323-140-5
- Language
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Englisch
- Bibliographic citation
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Series: BOFIT Discussion Papers ; No. 19/2016
- Classification
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Wirtschaft
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Corporate Finance and Governance: General
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
Corporate Finance and Governance: Government Policy and Regulation
Business and Securities Law
- Event
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Geistige Schöpfung
- (who)
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He, Qing
Huang, Jiyuan
Li, Dongxu
Lu, Liping
- Event
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Veröffentlichung
- (who)
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Bank of Finland, Institute for Economies in Transition (BOFIT)
- (where)
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Helsinki
- (when)
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2016
- Handle
- Last update
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10.03.2025, 11:45 AM CET
Data provider
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- He, Qing
- Huang, Jiyuan
- Li, Dongxu
- Lu, Liping
- Bank of Finland, Institute for Economies in Transition (BOFIT)
Time of origin
- 2016
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