Related Lending and Banking Development

Cull, Robert ; Haber, Stephen ; Imai, Masami

关键词: AFFILIATE;    ALLOCATION OF CAPITAL;    AMOUNT OF LOANS;    ASSET MANAGEMENT;    ASYMMETRIC INFORMATION;   

DOI  :  10.1596/1813-9450-5570
RP-ID  :  WPS5570

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Does related lending have positive ornegative effects on the development of banking systems? Thispaper analyzes a unique cross-country data set covering 74countries from 1990 to 2007, and finds that related lending,on average, does not have any effect on the growth ofcredit. The authors do find, however, that there areconditional relationships: related lending tends to retardthe growth of banking systems when rule of law is weak,while it tends to promote the growth of banking systems whenrule of law is strong. They also find that related lendingappears to be associated with looting when banks are ownedby non-financial firms, but that it does not whennon-financial firms are owned by banks. The results indicatethat whether related lending is positive or perniciousdepends critically on the institutional context in which ittakes place; there is no single "best policy"regarding related lending. These findings are robust toalternative specifications, including instrumental variable regressions.