| dc.description.abstract | This research is a study about firms loan rate and investment after financial restricting in Taiwan, the sample period is from 2000 to 2010, the influence effect including the structure of back, company and corporate-bank relationship, then we focus on the behavior of high credit risk firms.
We made use of regression models to go through the empirical analysis of our research, and the evidence shows that when firms borrow from banks belong to domestic financial holdings and their major banks, their loan rate will be lower, but if banks are foreign banks then loan rate will be higher. As for firms characteristics, if firms size and their cost divide by income was higher or their credit rate used to be lower but got upgrade lately, and if they belong to listed or public company, then their loan rate tend to be lower than others. By contrast, if firms belong to higher credit risk or their ratings downgrade lately, their loan rate will be higher, in addition, we found that when high risk firms provided collateral in the process of lending, they could get lower loan rate. In the case of investment, the evidence shows that the financial constraint situation exists in Taiwan, and free cash flow hypothesis was supported. When firms borrow capital from private domestic banks or foreign banks, they raise their investment and tend to use external funds, and then if firms were listed company that they also tend to use external funds.
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