Rating of Speedy Payday Loans

creditorData sources

The main data sources are the long-term and short-term borrowings data of the publicly-held companies contained in the database of the Taiwan Economic Journal together with the financial statements of these companies and financial data kept by relationship creditor banks. If part of the sample is missing any data, we will search for it from the Market Observation Post System (MOPS) or banking website. For materiality considerations, observations in this study possess two characteristics: the largest borrowing amount of the sample company in the current year; the relationship creditor bank must be on the list of the top 20 creditor banks. According to the statistics, the average firms’ borrowing amount from the largest creditor banks is NT$765 million; from the second largest creditor banks it is NT$389 million on average; the median from the 20th is NT$100 million. As mentioned before, we aim to understand after the first and second financial reforms the impact of the WOBD and HCCL events, and how the banks have set their loan spreads in response to the borrowers’ credit state and banking relationship. Therefore, our empirical periods purposely select the period 2006-200819, and include 513 listed companies, 404 OTC companies, 133 emerging market companies and 160 companies that are publicly-held but not belonging to the former three. Due to bank credit officers requiring the borrower to provide financial statements for the past three years as an important basis for credit ratings, therefore the corresponding empirical periods are 2003-2008 for borrowers.

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