Banking Relationships And The Performance Of Enterprises

The banking relationships are very important for enterprises. The enterprise is a corporation; they use fund from shareholders' capital or liabilities of loaners. Banking loan is an important way for enterprises get fund. The prior banking relations researches focused on topics of credit line, lending rate, the guarantee, and the moral hazard or adverse selection of lending banks. There has no research looked into the banking relations from the perspectives of corporate governance and communicating information of enterprises.Many enterprises have abilities to borrow from direct financial market with bonds, but they still lend fund from banks with private debts. The reason for enterprises kept good relation with their banks maybe to communicate inner massages of enterprises to outside investors. The bank loaners monitor the operation of enterprises for protection their right, the supervised stress could enhance the operating performance of borrowers. The objectives of this research are to explore the connections among banking relationships and operating performance of enterprises, and effects of communicating inner messages of enterprises from the perspectives of corporate governance and communicating information.This research experiments with the listed companies of Taiwan Stock Exchange Corp. and GreTai Securities Market on 2001-2004 of Taiwan. This research has some finds. 1. The banking relationships have influence the performance of enterprises. The operating performances of enterprises have negative relation with the number of contact banks. 2. Enterprises with higher ratio of banking loan will contact with more...