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Privileged Interfirm/Bank Relationships in Central Europe: Trigger or Trap for Corporate Governance?

Author

Listed:
  • Gerhard Fink

    (Vienna University of Business & Economics)

  • Peter R. Haiss

    (Bank Austria)

  • Lucjan T. Orlowski

    (Sacred Heart University)

  • Dominick Salvatore

    (Fordham University)

Abstract

The paper focuses on the question whether banks and capital markets in Central Europe are capable of exerting a positive influence on enterprise performance at the present stage of the economic transformation. These markets are characterised by privileged, collaborative interfirm/interbank relationships demonstrated through various channels. Among them is the competition for private deposits between commercial and national banks that are simultaneously supervisors of commercial banks, as is the case in Poland. Other channels include: heavily indebted large banks that are owners of industrial companies (as is the case in Slovakia with the steel mill VSZ owning the third largest bank IRB), investment funds that are facilitating industrial restructuring, and foreign banks holding only minority stakes in large domestic financial institutions.

Suggested Citation

  • Gerhard Fink & Peter R. Haiss & Lucjan T. Orlowski & Dominick Salvatore, 2005. "Privileged Interfirm/Bank Relationships in Central Europe: Trigger or Trap for Corporate Governance?," Finance 0502012, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpfi:0502012
    Note: Type of Document - pdf; pages: 32
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    References listed on IDEAS

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    1. Hayri, Aydin & McDermott, Gerald A, 1998. "The Network Properties of Corporate Governance and Industrial Restructuring: A Post-Socialist Lesson," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 7(1), pages 153-193, March.
    2. Franklin Allen, 1993. "Strategic Management and Financial Markets," Center for Financial Institutions Working Papers 94-04, Wharton School Center for Financial Institutions, University of Pennsylvania.
    3. Richard E. Baldwin & Joseph F. Francois & Richard Portes, 1997. "The costs and benefits of eastern enlargement: the impact on the EU and central Europe," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 12(24), pages 125-176.
    4. Vives, Xavier, 1991. "Regulatory reform in European banking," European Economic Review, Elsevier, vol. 35(2-3), pages 505-515, April.
    5. Linne, Thomas, 1999. "Contagion Effects of Central and East European Currency Crises," IWH Discussion Papers 96/1999, Halle Institute for Economic Research (IWH).
    6. Franklin Allen, 1993. "Strategic management and financial markets," Strategic Management Journal, Wiley Blackwell, vol. 14(S2), pages 11-22, December.
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    More about this item

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • P30 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - General

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