Bank Supervision and Corporate Finance
The authors examine the impact of bank supervision on the financing obstacles faced by almost 5,000 corporations across 49 countries. They find that firms in countries with strong official supervisory agencies that directly monitor banks tend to fa...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2003/05/2340134/bank-supervision-corporate-finance http://hdl.handle.net/10986/18209 |
| Summary: | The authors examine the impact of bank
supervision on the financing obstacles faced by almost 5,000
corporations across 49 countries. They find that firms in
countries with strong official supervisory agencies that
directly monitor banks tend to face greater financing
obstacles. Moreover, powerful official supervision tends to
increase firm reliance on special connections and corruption
in raising external finance, which is consistent with
political and regulatory capture theories. Creating a
supervisory agency that is independent of the government and
banks mitigates the adverse consequences of powerful
supervision. Finally, the authors find that bank supervisory
agencies that force accurate information disclosure by banks
and enhance private monitoring tend to ease the financing
obstacles faced by firms. |
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