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Title: The informational role of ownership networks in bank lending
Authors: Gao, Haoyu
Ru, Hong
Yang, Xiaoguang
Keywords: Business::Finance
Issue Date: 2022
Source: Gao, H., Ru, H. & Yang, X. (2022). The informational role of ownership networks in bank lending. Journal of Financial and Quantitative Analysis, 57(8), 2993-3017.
Project: RG134/20
Journal: Journal of Financial and Quantitative Analysis
Abstract: This paper documents novel large-sample evidence on the informational role of interfirm ownership networks in bank lending. Using comprehensive loan-level data in China, we find that banks internal loan ratings at issuance predict subsequent delinquent events more accurately when borrowers are connected to banks existing customers via ownership networks. In post-issuance monitoring for delinquent loans, banks with access to ownership networks manage to downgrade their initial ratings before late payments. These findings suggest that ownership networks facilitate the transmission of private information for bank lending. Moreover, ownership networks are more important for transmitting information related to small and medium enterprises.
ISSN: 0022-1090
DOI: 10.1017/S0022109021000788
Schools: Nanyang Business School 
Rights: © 2022 The Author(s). Published by Cambridge University Press on behalf of The Michael G. Foster School of Business, University of Washington. All rights reserved.
Fulltext Permission: none
Fulltext Availability: No Fulltext
Appears in Collections:NBS Journal Articles

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