M. Deniz Yavuz
Krannert Graduate School of Management
403 W. State Street
West Lafayette, IN 47907-2056
Tel: 314 935 6339
NBER Working Papers and Publications
|April 2013||State-run Banks, Money Growth, and the Real Economy|
with Randall Morck, Bernard Yeung: w19004
Aggregate credit and investment growth correlate with prior money growth more strongly in economies whose banking systems are more fully state-run. Within countries, individual state-run banks’ lending correlates with prior money growth, while otherwise similar private-sector banks’ lending does not. Tests exploiting heterogeneity in likely political pressure on state-run banks associated with, e.g. central bank independence, privatizations, and election years, are consistent with a higher correlation of state-run banks’ lending with prior money growth if political pressure is stronger. These findings are consistent with a command-and-control channel of monetary stimulus transmission operating via state-run banks.
|December 2009||Banking System Control, Capital Allocation, and Economy Performance|
with Randall Morck, Bernard Yeung: w15575
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".
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. citation courtesy of