Corruption And Politicians: Rent-Seeking In An Emerging Financial Market
- Topics:
- Organization
- Tags:
- Finance,
- Financial,
- Financial Accounting,
- Financial Market,
- Financial Services,
- Harvard University,
- Politician
- Source:
- Harvard University
FREE Registration is required
Overview: Corrupt politicians are often blamed for economic ills, particularly in less developed economies. Using a loan-level data set containing all corporate loans in Pakistan between 1996 and 2002, we investigate political corruption in banking. Classifying a firm as "Political" if its director participates in an election, we examine the extent, nature, and economic costs of political rent seeking. We find that political firms borrow 40% more and have 50% higher default rates than other firms. Such preferential treatment occurs exclusively in government banks; private banks provide no political favors. Investigating this further we find that government banks not only select bad politicians but conditional on selection, lend larger amounts to them.
(Is this item miscategorized? Does it need more tags? Let us know.)
Format: PDF | Size: 455KB | Date: Sep 2004 | Pages: 41
People who downloaded this item also downloaded
 |
"Deciding to Go International" |
|
Environmental Factors Of A Marketing Strategy |
|
Porter’s Five Forces |
|
Global Strategic Management |
|
Mapping The New Political Risks |
