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The impact of public ownership in the lending sector

Author

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  • Arup Bose
  • Debashis Pal
  • David E. M. Sappington

Abstract

We examine the effects of increased government ownership of suppliers in the lending sector, which induces increased concern with total welfare and reduced concern with profit. Such increased ownership of a lender can have unanticipated effects. For instance, it can increase lender profit. Furthermore, borrower welfare often declines as government ownership increases in a lender with a relatively limited ability to discern the true quality of borrowers projects. In addition, there are settings in which increased government ownership of a lender has no impact on either lender profit or borrower welfare.

Suggested Citation

  • Arup Bose & Debashis Pal & David E. M. Sappington, 2014. "The impact of public ownership in the lending sector," Canadian Journal of Economics, Canadian Economics Association, vol. 47(4), pages 1282-1311, November.
    • Handle: RePEc:cje:issued:v:47:y:2014:i:4:p:1282-1311
    DOI: 10.1111/caje.12109
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    Cited by:

    1. Ping-Lun Tseng & Wen-Chung Guo, 2022. "Fintech, Credit Market Competition, and Bank Asset Quality," Journal of Financial Services Research, Springer;Western Finance Association, vol. 61(3), pages 285-318, June.
    2. Junichi Haraguchi & Toshihiro Matsumura, 2020. "Endogenous public and private leadership with diverging social and private marginal costs," Manchester School, University of Manchester, vol. 88(5), pages 699-730, September.
    3. Junichi Haraguchi & Toshihiro Matsumura, 2020. "Optimal privatization policy with asymmetry among private firms," Bulletin of Economic Research, Wiley Blackwell, vol. 72(3), pages 213-224, July.
    4. Alexandra – Irina BADEA & Nicolae Daniel MAI?A & Daniel ALEXANDRU & Nicoleta Loredana MEGA, 2022. "Integrated Multi - Level Approach to Public Service Performance Evaluation," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 23(2), pages 292-301, May.
    5. Haraguchi, Junichi & Matsumura, Toshihiro & Yoshida, Shohei, 2018. "Competitive pressure from neighboring markets and optimal privatization policy," Japan and the World Economy, Elsevier, vol. 46(C), pages 1-8.
    6. Ping‐Lun Tseng & Wen‐Chung Guo, 2022. "Bank risk‐taking in a mixed duopoly: The role of the state‐owned bank," International Review of Finance, International Review of Finance Ltd., vol. 22(4), pages 688-724, December.
    7. Lin, Ming Hsin & Matsumura, Toshihiro, 2017. "Optimal Privatization and Uniform Subsidy Policies: A Synthesis," MPRA Paper 77285, University Library of Munich, Germany.
    8. Toshihiro Matsumura & Akira Ogawa, 2017. "Inefficient but Robust Public Leadership," Journal of Industry, Competition and Trade, Springer, vol. 17(4), pages 387-398, December.
    9. Juan Carlos Bárcena-Ruiz & María Begoña Garzón, 2020. "Partial privatization in an international mixed oligopoly under product differentiation," Journal of Economics, Springer, vol. 131(1), pages 77-100, September.
    10. Chen, Jiaqi & Lee, Sang-ho & Muminov, Timur K., 2019. "Time-inconsistent Output Subsidy/Tax Policies in Free-entry Mixed Markets," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 60(1), pages 61-77, June.
    11. Guo, Wen-Chung & Tseng, Ping-Lun, 2023. "COVID-19, bank risk, and capital regulation: The aggregate shock and social distancing," The Quarterly Review of Economics and Finance, Elsevier, vol. 92(C), pages 155-173.
    12. Ming Hsin Lin & Toshihiro Matsumura, 2018. "Optimal Privatisation Policy under Private Leadership in Mixed Oligopolies," Arthaniti: Journal of Economic Theory and Practice, , vol. 17(1), pages 1-14, June.
    13. Eberhard, Erich K. & Hicks, Jessica & Simon, Adam C. & Arbic, Brian K., 2022. "Livelihood considerations in land-use decision-making: Cocoa and mining in Ghana," World Development Perspectives, Elsevier, vol. 26(C).

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