Bank ownership structure, lending corruption and the regulatory environment

Thierno Barry, Laetitia Lepetit and Frank Strobel

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Abstract: We empirically examine whether bank lending corruption is in uenced by the ownership structure of banks, a country's regulatory environment and its level of economic development. We nd that corruption in lending is higher when state- owned banks or family-owned banks provide a higher proportion of credit to the economy, in both developed and developing countries. A stronger regulatory environment, either through a stronger supervisory regime or a higher quality of external audits, helps to curtail bank lending corruption if induced by family- controlled ownership, but not if induced by state-controlled ownership. We further nd that controlled-ownership of banks by other banks contributes to reduce corruption in lending; the same applies to widely-held ownership of banks, but only for developed countries

Keywords: Bank lending; Ownership structure; corruption; regulatory environment; economic development (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (18)

Published in Journal of Comparative Economics, 2016, 44, pp.732-751

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01204938

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