Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/32079
Title: Concentrated control, institutions, and banking sector : an international study
Authors: Haw, IM
Ho, SSM
Hu, B
Wu, D
Keywords: Bank operations
Bank regulations
Concentrated control
Legal institutions
Issue Date: 2010
Publisher: Elsevier
Source: Journal of banking and finance, 2010, v. 34, no. 3, p. 485-497 How to cite?
Journal: Journal of banking and finance 
Abstract: Using a broad sample of listed commercial banks in East Asia and Western Europe, this paper investigates the relations among concentrated control, a set of bank operating characteristics, and legal and regulatory regimes. We find that banks with concentrated control exhibit poorer performance, lower cost efficiency, greater return volatility, and higher insolvency risk, relative to widely held ones. We also document that legal institutions and private monitoring effectively reduce the detrimental effects of concentrated control and that official disciplinary power plays a weak governance role, whereas government intervention exacerbates the adverse effects. Further evidence shows that the relations between control concentration and bank operating characteristics are curvilinear and vary according to the types of controlling owners. Overall, our findings support the contention that country-level institutions play important roles in constraining insider expropriation, and that private monitoring mechanisms are more effective than are public rules and supervision in governing banks.
URI: http://hdl.handle.net/10397/32079
ISSN: 0378-4266
EISSN: 1872-6372
DOI: 10.1016/j.jbankfin.2009.08.013
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