Bank ownership and connected lending

Siwapong Dheera-aumpon

International Review of Economics & Finance, 2016, vol. 41, issue C, 274-286

Abstract: Bank ownership concentration may not only induce banks’ controlling owners to become involved in connected lending but also deter them from doing so. This paper examines how the cash flow rights of the banks’ controlling owners are associated with the need for special connections with banks, which is a proxy measure of connected lending. Using data from more than 2,600 firms across 25 countries, this study finds that the cash flow rights increase the need for special connections, but the increase becomes smaller as the cash flow rights increase. No evidence is found that the cash flow rights result in a decrease in the need for special connections.

Keywords: Firm financing; Financial institutions; Bank ownership (search for similar items in EconPapers)
JEL-codes: G21 G32 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:41:y:2016:i:c:p:274-286

DOI: 10.1016/j.iref.2015.08.005

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