Parent Influence on Loan Pricing by Czech Banks
| Autor: | Marie Raková, Alexis Derviz |
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| Rok vydání: | 2012 |
| Předmět: | |
| Zdroj: | Prague Economic Papers. 21:434-449 |
| ISSN: | 2336-730X 1210-0455 |
| DOI: | 10.18267/j.pep.433 |
| Popis: | We investigate the infl uence which the fi nancial condition of a multinational bank group may have on the lending rates of its affi liates, using data from the ten biggest banks in the Czech Republic under foreign control. The analysis is based on a theory of bank lending in which the implicit opportunity costs of lending by a foreign bank affi liate are infl uenced by the scarcity of funds within the multinational conglomerate. The theory predicts that parent banks’ infl uence should be stronger in loan segments with more pronounced information asymmetry. Our empirical model, which explains the interest rate charged by the affi liate by means of affi liate-level controls and a parent infl uence variable, is tested for three categories of commercial non-fi nancial borrowers (domestically owned fi rms, foreign-owned fi rms and the self-employed). Evidence of parent infl uence is found in a limited number of cases of banks and borrower classes for which the constraint on fund fl ow within the parent bank group is likely to be tight, particularly when the borrower class is of strategic importance for the affi liate’s overall performance. |
| Databáze: | OpenAIRE |
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