வணிகம் மற்றும் பொருளாதார இதழ்

Impact of the Bank/Company Relationship on Information Asymmetry

Abstract

Amina Benattou EL Idrissi and Karim Bennis

In a bank/company report, the level of information and understanding of what is happening in the company is inevitably incomparable between a banker and a company executive. This difference largely explains the difference of opinion between the two parties.

After a long hiatus, research has massively focused on explaining the different aspects of the relationship between the bank and the company. Indeed, the theory of financial intermediation has evolved considerably in recent years following the integration of information asymmetry problems. Banks have particular expertise in valuing businesses, making them more suitable than other creditors to select and control borrowers. Such superiority of banks is attributed to the Bank-Enterprise relationship, which is now a crucial element in the elimination of asymmetric information problems and the reduction of the scale of risk.

This study is motivated by the lack of consensus on the role of the Bank - Enterprise relationship in disclosing information. More specifically, the major concern of this paper is to bring out, through the literature, the impact of the bank/enterprise relationship on information asymmetry.