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The impact of changes in bank ownership structure on the allocation of capital: International evidence

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  • Taboada, Alvaro G.
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    Abstract

    A new wave of bank privatizations in the past decade has significantly changed the ownership structure of banking systems around the world. This paper explores how these changes affect the allocation of capital within countries. Increases in domestic blockholder ownership of banks adversely affect the allocation of capital through increased lending activity to less productive industries and to those with less dependence on external finance. This result is more pronounced in countries with higher levels of corruption. I find some evidence that foreign presence improves capital allocation efficiency by increasing lending to more productive industries, primarily in common law countries.

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    File URL: http://www.sciencedirect.com/science/article/pii/S0378426611000884
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Banking & Finance.

    Volume (Year): 35 (2011)
    Issue (Month): 10 (October)
    Pages: 2528-2543

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    Handle: RePEc:eee:jbfina:v:35:y:2011:i:10:p:2528-2543

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    Web page: http://www.elsevier.com/locate/jbf

    Related research

    Keywords: Bank ownership structure Capital allocation Bank lending Government ownership;

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    Cited by:
    1. Ilduara Busta & Evis Sinani & Steen Thomsen, 2014. "Ownership concentration and market value of European banks," Journal of Management and Governance, Springer, vol. 18(1), pages 159-183, February.
    2. Michiel Bijlsma & Andrei Dubovik, 2014. "Banks, Financial Markets and Growth in Developed Countries: a Survey of the empirical literature," CPB Discussion Paper 266, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Mamatzakis, E, 2013. "Does weather affect US bank loan efficiency?," MPRA Paper 51616, University Library of Munich, Germany.

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