Do Incumbents Manipulate Access to Finance During Banking Crises?

The author tests the hypothesis that during systemic banking crises, access to finance is opportunistically tightened by incumbents to eliminate or weaken competition from mainly young firms. He finds this to be especially true in more corrupt countries. To do so, he uses a methodology similar to Ra...

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Main Author:	Feijen, Erik
Format:	Publications & Research
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ACCOUNTABILITY ACCOUNTING ADVERSE SELECTION ASSET PRICES ASSOCIATED COMPANIES AVERAGE COSTS BANK LENDING BANK LOANS BANKING CONCENTRATION BANKING CRISES BANKING SYSTEM BANKRUPTCY BANKS BARRIERS TO ENTRY BENCHMARK CAPITAL BUDGETING CAPITAL EXPENDITURES CONNECTED LENDING CORPORATE GOVERNANCE CORRUPT COUNTRIES CORRUPTION CORRUPTION PERCEPTIONS CORRUPTION VARIABLE CREDIT MARKETS DATA AVAILABILITY DEBT DEREGULATION DEVALUATION ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POWER ECONOMICS ECONOMIES OF SCALE EMERGING MARKETS EXCHANGE RATES FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL ECONOMICS FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL SYSTEMS GDP GDP PER CAPITA ILLIQUIDITY INCOME INFLATION INSTITUTIONAL CHANGE INSTITUTIONAL FRAMEWORK INSTITUTIONAL VARIABLES MACROECONOMIC VARIABLES MONOPOLY RENTS MORAL HAZARD NET PROFIT PERCEPTIONS INDEX PERFECT COMPETITION POLICY IMPLICATIONS POLITICAL ECONOMY POLITICAL INSTITUTIONS PRESENT VALUE PRIME MINISTER PROFITABILITY PROPERTY RIGHTS REAL SECTOR REGRESSION MODELS SYSTEMIC BANKING CRISES TOTAL OUTPUT TRADE LIBERALIZATION TRANSPARENCY VALUE ADDED VALUE OF OUTPUT WAGES WORKING CAPITAL
Online Access:	http://documents.worldbank.org/curated/en/2005/07/6048663/incumbents-manipulate-access-finance-during-banking-crises http://hdl.handle.net/10986/8209

id	okr-10986-8209
recordtype	oai_dc
spelling	okr-10986-82092021-04-23T14:02:43Z Do Incumbents Manipulate Access to Finance During Banking Crises? Feijen, Erik ACCOUNTABILITY ACCOUNTING ADVERSE SELECTION ASSET PRICES ASSOCIATED COMPANIES AVERAGE COSTS BANK LENDING BANK LOANS BANKING CONCENTRATION BANKING CRISES BANKING SYSTEM BANKRUPTCY BANKS BARRIERS TO ENTRY BENCHMARK CAPITAL BUDGETING CAPITAL EXPENDITURES CONNECTED LENDING CORPORATE GOVERNANCE CORRUPT COUNTRIES CORRUPTION CORRUPTION PERCEPTIONS CORRUPTION VARIABLE CREDIT MARKETS DATA AVAILABILITY DEBT DEREGULATION DEVALUATION ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POWER ECONOMICS ECONOMIES OF SCALE EMERGING MARKETS EXCHANGE RATES FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL ECONOMICS FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL SYSTEMS GDP GDP PER CAPITA ILLIQUIDITY INCOME INFLATION INSTITUTIONAL CHANGE INSTITUTIONAL FRAMEWORK INSTITUTIONAL VARIABLES MACROECONOMIC VARIABLES MONOPOLY RENTS MORAL HAZARD NET PROFIT PERCEPTIONS INDEX PERFECT COMPETITION POLICY IMPLICATIONS POLITICAL ECONOMY POLITICAL INSTITUTIONS PRESENT VALUE PRIME MINISTER PROFITABILITY PROPERTY RIGHTS REAL SECTOR REGRESSION MODELS SYSTEMIC BANKING CRISES TOTAL OUTPUT TRADE LIBERALIZATION TRANSPARENCY VALUE ADDED VALUE OF OUTPUT WAGES WORKING CAPITAL The author tests the hypothesis that during systemic banking crises, access to finance is opportunistically tightened by incumbents to eliminate or weaken competition from mainly young firms. He finds this to be especially true in more corrupt countries. To do so, he uses a methodology similar to Rajan and Zingales (1998) on three-digit manufacturing industry-level data provided by the United Nations Statistics Division for about 15 industrial and developing countries in over 20 industries on average. The author shows that price-cost margins in externally more financially dependent industries are higher during crisis than in externally less dependent industries in countries with higher levels of corruption. He finds the opposite relationship for the change in the industry-level number of establishments during a crisis. The results withstand an array of robustness checks, including using different indices of corruption, different controls, and robust estimation techniques. 2012-06-15T20:31:39Z 2012-06-15T20:31:39Z 2005-07 http://documents.worldbank.org/curated/en/2005/07/6048663/incumbents-manipulate-access-finance-during-banking-crises http://hdl.handle.net/10986/8209 English Policy Research Working Paper; No. 3660 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ACCOUNTABILITY ACCOUNTING ADVERSE SELECTION ASSET PRICES ASSOCIATED COMPANIES AVERAGE COSTS BANK LENDING BANK LOANS BANKING CONCENTRATION BANKING CRISES BANKING SYSTEM BANKRUPTCY BANKS BARRIERS TO ENTRY BENCHMARK CAPITAL BUDGETING CAPITAL EXPENDITURES CONNECTED LENDING CORPORATE GOVERNANCE CORRUPT COUNTRIES CORRUPTION CORRUPTION PERCEPTIONS CORRUPTION VARIABLE CREDIT MARKETS DATA AVAILABILITY DEBT DEREGULATION DEVALUATION ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POWER ECONOMICS ECONOMIES OF SCALE EMERGING MARKETS EXCHANGE RATES FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL ECONOMICS FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL SYSTEMS GDP GDP PER CAPITA ILLIQUIDITY INCOME INFLATION INSTITUTIONAL CHANGE INSTITUTIONAL FRAMEWORK INSTITUTIONAL VARIABLES MACROECONOMIC VARIABLES MONOPOLY RENTS MORAL HAZARD NET PROFIT PERCEPTIONS INDEX PERFECT COMPETITION POLICY IMPLICATIONS POLITICAL ECONOMY POLITICAL INSTITUTIONS PRESENT VALUE PRIME MINISTER PROFITABILITY PROPERTY RIGHTS REAL SECTOR REGRESSION MODELS SYSTEMIC BANKING CRISES TOTAL OUTPUT TRADE LIBERALIZATION TRANSPARENCY VALUE ADDED VALUE OF OUTPUT WAGES WORKING CAPITAL
spellingShingle	ACCOUNTABILITY ACCOUNTING ADVERSE SELECTION ASSET PRICES ASSOCIATED COMPANIES AVERAGE COSTS BANK LENDING BANK LOANS BANKING CONCENTRATION BANKING CRISES BANKING SYSTEM BANKRUPTCY BANKS BARRIERS TO ENTRY BENCHMARK CAPITAL BUDGETING CAPITAL EXPENDITURES CONNECTED LENDING CORPORATE GOVERNANCE CORRUPT COUNTRIES CORRUPTION CORRUPTION PERCEPTIONS CORRUPTION VARIABLE CREDIT MARKETS DATA AVAILABILITY DEBT DEREGULATION DEVALUATION ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC POWER ECONOMICS ECONOMIES OF SCALE EMERGING MARKETS EXCHANGE RATES FINANCIAL CRISES FINANCIAL CRISIS FINANCIAL DEVELOPMENT FINANCIAL ECONOMICS FINANCIAL LIBERALIZATION FINANCIAL MARKETS FINANCIAL SECTOR FINANCIAL STRUCTURE FINANCIAL SYSTEMS GDP GDP PER CAPITA ILLIQUIDITY INCOME INFLATION INSTITUTIONAL CHANGE INSTITUTIONAL FRAMEWORK INSTITUTIONAL VARIABLES MACROECONOMIC VARIABLES MONOPOLY RENTS MORAL HAZARD NET PROFIT PERCEPTIONS INDEX PERFECT COMPETITION POLICY IMPLICATIONS POLITICAL ECONOMY POLITICAL INSTITUTIONS PRESENT VALUE PRIME MINISTER PROFITABILITY PROPERTY RIGHTS REAL SECTOR REGRESSION MODELS SYSTEMIC BANKING CRISES TOTAL OUTPUT TRADE LIBERALIZATION TRANSPARENCY VALUE ADDED VALUE OF OUTPUT WAGES WORKING CAPITAL Feijen, Erik Do Incumbents Manipulate Access to Finance During Banking Crises?
relation	Policy Research Working Paper; No. 3660
description	The author tests the hypothesis that during systemic banking crises, access to finance is opportunistically tightened by incumbents to eliminate or weaken competition from mainly young firms. He finds this to be especially true in more corrupt countries. To do so, he uses a methodology similar to Rajan and Zingales (1998) on three-digit manufacturing industry-level data provided by the United Nations Statistics Division for about 15 industrial and developing countries in over 20 industries on average. The author shows that price-cost margins in externally more financially dependent industries are higher during crisis than in externally less dependent industries in countries with higher levels of corruption. He finds the opposite relationship for the change in the industry-level number of establishments during a crisis. The results withstand an array of robustness checks, including using different indices of corruption, different controls, and robust estimation techniques.
format	Publications & Research
author	Feijen, Erik
author_facet	Feijen, Erik
author_sort	Feijen, Erik
title	Do Incumbents Manipulate Access to Finance During Banking Crises?
title_short	Do Incumbents Manipulate Access to Finance During Banking Crises?
title_full	Do Incumbents Manipulate Access to Finance During Banking Crises?
title_fullStr	Do Incumbents Manipulate Access to Finance During Banking Crises?
title_full_unstemmed	Do Incumbents Manipulate Access to Finance During Banking Crises?
title_sort	do incumbents manipulate access to finance during banking crises?
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/07/6048663/incumbents-manipulate-access-finance-during-banking-crises http://hdl.handle.net/10986/8209
_version_	1764407506168184832

Do Incumbents Manipulate Access to Finance During Banking Crises?

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