Banking Regulation, Institutional Framework and Capital Structure: International Evidence from Industry Data

Natalia Utrero-González

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: This paper uses an industry data set from the European Union, United States and Japan to investigate the degree to which banking regulation and institutional environment affects corporate finance choices. La Porta et al. (1997, 1998) have shown the influence of investor protection on financing decisions. We extend these measures of investor protection and develop a measure for banking regulation. We both confirm prior findings and provide additional evidence of "institutional effects". We find that prudential banking regulation is positively associated with industry indebtedness, indicating that prudential rules make it easier for firms to access to credit market. Furthermore, we also find that disclosure rules affect leverage decisions.

Keywords: banking regulation; investor protection; capital structure (search for similar items in EconPapers)
JEL-codes: G18 G32 G38 (search for similar items in EconPapers)
Date: 2003-11-01
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Published in The Quarterly Review of Economics and Finance, 2007, 47, (4), pages 481-506

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Journal Article: Banking regulation, institutional framework and capital structure: International evidence from industry data (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:111

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