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Bank ownership and connected lending

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  • Dheera-aumpon, Siwapong

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.

Suggested Citation

  • Dheera-aumpon, Siwapong, 2016. "Bank ownership and connected lending," International Review of Economics & Finance, Elsevier, vol. 41(C), pages 274-286.
    • Handle: RePEc:eee:reveco:v:41:y:2016:i:c:p:274-286
    DOI: 10.1016/j.iref.2015.08.005
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    References listed on IDEAS

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    Cited by:

    1. Dheera-aumpon, Siwapong, 2019. "Collectivism and connected lending," Research in International Business and Finance, Elsevier, vol. 48(C), pages 258-270.
    2. Jou, Rosemary & Chen, Shi & Tsai, Jeng-Yan, 2017. "Politically connected lending, government capital injection, and bank performance," International Review of Economics & Finance, Elsevier, vol. 47(C), pages 220-232.

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    More about this item

    Keywords

    Firm financing; Financial institutions; Bank ownership;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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