Document Type
Article
Comments
A contribution to the conference on Cultural Approaches to Asian Financial Markets that took place at Cornell Law School on April 26, 2003.
Abstract
It is a widely circulated myth that Chinese family firms rely exclusively on kinship ties and network capital to finance their domestic and international operations. In this empirical paper, I argue that large Chinese family firms are increasingly engaging with financial markets on a global scale. In order to finance their transnational business activities, these firms require financial services from banks beyond their domestic economies, resulting in a growing number and geographical spread of their principal banks. Second, I contend that as these Chinese family firms are diversifying their principal banks beyond a narrow confinement to other Chinese family-owned banks and financial institutions, their corporate performance will improve over time. Drawing upon time-series data (1996, 1998, and 2001) on over 150 Chinese family firms listed on the Singapore Exchange, I discuss both the geographical origins of their principal banks and the impact of the selection of these banks on their corporate performance before and after the 1997/1998 Asian economic crisis. I also show whether there is a relationship between the use of principal banks by these Chinese family firms and their shareholding structures.
Date of Authorship for this Version
April 2003
Recommended Citation
Yeung, Henry W., "Financing Chinese Capitalism: Principal Banks, Economic Crisis, and Chinese Family Firms in Singapore" (2003). Cultural Approaches to Asian Financial Markets. 1.
https://scholarship.law.cornell.edu/ealccs_caafm/1