Politicians and Banks: Political Influences on Government-Owned Banks in Emerging Markets

Posted: 26 Oct 2005  

Serdar Dinc

Rutgers University

Abstract

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.

Keywords: Corporate Governance, Political Economy, Corruption, State-Owned Enterprises, Electoral Cycle

JEL Classification: G21, G32, D72, D73

Suggested Citation

Dinc, Serdar, Politicians and Banks: Political Influences on Government-Owned Banks in Emerging Markets. Journal of Financial Economics, Vol. 77, pp. 453-479, August 2005. Available at SSRN: https://ssrn.com/abstract=830744

Serdar Dinc (Contact Author)

Rutgers University ( email )

111 Washington Avenue
Newark, NJ 07102
United States

HOME PAGE: http://serdardinc.com

Paper statistics

Abstract Views
2,164