Politicians “on board”! Do political connections affect banking activities in Italy?
AbstractThis paper analyzes the effects of political presence in the boards of directors of cooperative banks. We refer our analysis to all politicians (almost 160.000) belonging to a political body in Italy. Overall, our dataset contains 1.858 board members referring to 127 cooperative banks. Results show that politically connected banks, in which politicians have executive roles in the board of directors, display higher net interest revenues, lower quality of the loans portfolio and lower efficiency relative to a control group of non-connected counterparts. Therefore, in the current debate on the reform of the statutes of the Italian cooperative banks, we argue that the problem is not for politicians to be in the boards but for them to hold executive positions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 33549.
Date of creation: 30 Jun 2011
Date of revision:
Cooperative Banks; Politics; Corporate Governance;
Find related papers by JEL classification:
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-10-01 (All new papers)
- NEP-BAN-2011-10-01 (Banking)
- NEP-EFF-2011-10-01 (Efficiency & Productivity)
- NEP-HME-2011-10-01 (Heterodox Microeconomics)
- NEP-POL-2011-10-01 (Positive Political Economics)
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