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.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number
111.
Length: Date of creation: 01 Nov 2003 Date of revision: Publication status: Published in The Quarterly Review of Economics and Finance, 2007, 47, (4), pages 481-506 Handle: RePEc:sef:csefwp:111