NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Banking System Control, Capital Allocation, and Economy Performance

Randall Morck, M. Deniz Yavuz, Bernard Yeung

NBER Working Paper No. 15575
Issued in December 2009
NBER Program(s):   CF

We observe less efficient capital allocation in countries whose banking systems are more thoroughly controlled by tycoons or families. The magnitude of this effect is similar to that of state control over banking. Unlike state control, tycoon or family control also correlates with slower economic and productivity growth, greater financial instability, and worse income inequality. These findings are consistent with theories that elite-capture of a country’s financial system can embed “crony capitalism”.

download in pdf format
   (325 K)

email paper

This paper is available as PDF (325 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w15575

Published: Morck, Randall & Deniz Yavuz, M. & Yeung, Bernard, 2011. "Banking system control, capital allocation, and economy performance," Journal of Financial Economics, Elsevier, vol. 100(2), pages 264-283, May.

Users who downloaded this paper also downloaded these:
Barth, Caprio, and Levine Banking Systems around the Globe: Do Regulation and Ownership Affect Performance and Stability?
Mitchener and Wheelock w15710 Does the Structure of Banking Markets Affect Economic Growth? Evidence from U.S. State Banking Markets
Acharya, Shin, and Yorulmazer w15567 Crisis Resolution and Bank Liquidity
Calomiris w15403 Banking Crises and the Rules of the Game
Beck and Levine w8982 Industry Growth and Capital Allocation: Does Having a Market- or Bank-Based System Matter?
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us