Politicians and banks: Political influences on government-owned banks in emerging markets

✍ Scribed by I. Serdar Dinç

• Book ID: 113710756
• Publisher: Elsevier Science
• Year: 2005
• Tongue: English
• Weight: 297 KB
• Volume: 77
• Category: Article
• ISSN: 0304-405X
• DOI: 10.1016/j.jfineco.2004.06.011

✦ Synopsis

Government ownership of banks is very common in countries other than the United States. This paper provides cross-country, bank-level empirical evidence about political influences on these banks. It shows that government-owned banks increase their lending in election years relative to private banks. This effect is robust to controlling for country-specific macroeconomic and institutional factors as well as bank-specific factors. The increase in lending is about 11% of a government-owned bank's total loan portfolio or about 0.5% of the median country's GDP per election per government-owned bank.