TY  - JOUR
AU  - Beck,Thorsten
AU  - Demirguc-Kunt,Asli
AU  - Levine,Ross
TI  - Bank Supervision and Corporate Finance
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9620
PY  - 2003
Y2  - April 2003
UR  - http://www.nber.org/papers/w9620
L1  - http://www.nber.org/papers/w9620.pdf
N1  - Author contact info:
Thorsten Beck
The World Bank
1818 H Street N.W.
Mail Stop MC 3-307
Washington, D.C. 20433
E-Mail: tbeck@worldbank.org

Asli Demirguc-Kunt
World Bank
1818 H Street
Washington, DC  20433
E-Mail: ademirguckunt@worldbank.org

Ross Levine
Department of Economics
Brown University
64 Waterman Street
Providence, RI 02912
Tel: 401/863-2170
E-Mail: ross_levine@brown.edu
AB  - We examine the impact of bank supervision on the financing obstacles faced by almost 5,000 corporations across 49 countries. We find that firms in countries with strong official supervisory agencies that directly monitor banks tend to face greater financing obstacles. Moreover, powerful official supervision tends to increase firm reliance on special connections and corruption in raising external finance, which is consistent with political/regulatory capture theories. Creating a supervisory agency that is independent of the government and banks mitigates the adverse consequences of powerful supervision. Finally, we find that bank supervisory agencies that force accurate information disclosure by banks and enhance private monitoring tend to ease the financing obstacles faced by firms.
ER  -