Bank financing and corporate governance
Extant literature suggests that bank monitoring improves corporate governance. This paper demonstrates that inefficiency in banking can also significantly reduce the equity capital markets' disciplinary power. Specifically, we show that in an environment in which the banking system is dominated by inefficient state-owned banks, controlling shareholders' tunneling activity is positively associated with firms' bank loan access. This relation is particularly strong in firms with high...[Show more]
|Collections||ANU Research Publications|
|Source:||Journal of Corporate Finance|
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