Research On Impact Of Listed Companies’ Disclosed Violation On Bank Loans

Based on reputation mechanism, creditors supervision theory, and characteristicdifferences to types of violation, this paper build theoretical framework whichdisclosure the impact of listed companies`different types of violations on bank loans.Using non-parametric test, it studied Chinese listed companies`disclosed illegalbehavior during2000-2010, trying to explore bank loans`different sensitivity against10types of violations.The study found that violations of listed companies will indeed have a significantnegative impact on its bank loans. It shows that, firms’ bank loan after the punishmentwas significant different from what it was before. In recent years, listed companies’illegal behavior in China conduct frequently and its harmfulness are getting worse.Since the bank loans as a significant channel for financing of listed companies,meanwhile, banks as creditors have the ability to supervise and information advantageover others on listed companies, so we have to focus on the relationship between thetwo. According to the comparison of bank loans for each type of violation disclosedbefore and after, we can find that there is a certain degree of difference among thecharacteristics of variation, which reflected in fluctuations of the total incrementalloans, short-term loans and the incremental borrowing rate. To further validate thesensitivity difference between bank loans of different types of violations, this articlecompared the differences in the bank loans of violations disclosed before and after,and concluded by pairwise comparison to identify the source of specific differences.Most violations have an impact on its bank loans, but the impact of virtual assets andfalse statements were not significant. There was no difference in the degree ofinfluence among the majority eight types of violations which causing a significantchange in bank loans. But there were significant differences impact on total loansincremental between illegal purchase and delayed disclosure, as well as securitybreaches. And there were significant differences impact on lending rate betweenillegal purchases of stock and delayed disclosure, as well as big shareholders occupythe listing corporation assets.After obtaining the relevant conclusions, the paper analyzes the reasons in twosteps. Explore theoretically from five angles, punishment delay, punishment style, theindustry distribution, operating conditions and banking supervision (shareholders- Creditors conflicts of interest). On this basis, discuss the impact differences ofdifferent violation, take illegal purchase of stock, virtual assets and delayeddisclosure, three types of violation, for example, to do the relevant empirical test. Itshows that they do exist differences, and thus causing the different impacts on bankborrowings.