@techreport{NBERw8848,
 title = "Related Lending",
 author = "Rafael La Porta and Florencio Lopez-de-Silane and Guillermo Zamarripa",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "8848",
 year = "2002",
 month = "March",
 URL = "http://www.nber.org/papers/w8848",
 abstract = {In many countries, banks lend to firms controlled by the bank?s owners.  We examine the benefits of related lending using a newly assembled dataset for Mexico.  Related lending is prevalent (20% of commercial loans) and takes place on better terms than arm?s-length lending (annual interest rates are 4 percentage points lower).  Related loans are 33% more likely to default and, when they do, have lower recovery rates (30% less) than unrelated ones.  The evidence supports the view that rather than enhance information sharing, related lending is a manifestation of looting.},
}