کنترل سیستم بانکی، تخصیص سرمایه و عملکرد اقتصاد
|کد مقاله||سال انتشار||تعداد صفحات مقاله انگلیسی||ترجمه فارسی|
|18316||2011||20 صفحه PDF||سفارش دهید|
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Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of Financial Economics, Volume 100, Issue 2, May 2011, Pages 264–283
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.”
The social purpose of the financial system is to allocate an economy’s savings to their highest value uses (Schumpeter, 1912, Schumpeter, 1942, Tobin, 1989, Aghion and Howitt, 1997 and Wurgler, 2000). Economic growth thus correlates strongly with financial development (King and Levine, 1993a, King and Levine, 1993b, Demirguc-Kunt and Levine, 1996, Levine, 1996, Demirguc-Kunt and Maksimovic, 1998, Levine and Zervos, 1998, Rajan and Zingales, 1998, Beck et al., 2000, Levine et al., 2000 and Beck and Levine, 2002). Rajan and Zingales, 2003 and Rajan and Zingales, 2004, noting the persistent financial underdevelopment of some economies and the full-scale reversal of financial development in others, posit the “elite capture” of countries’ financial systems. This occurs if an elite – in this case, the already wealthy – attain sufficient control over an economy’s financial sector to skew capital allocation in their favor. Elites come in many forms, but La Porta, Lopez-de-Silanes, and Shleifer (1999) show that most large firms in most countries are controlled by wealthy families, so linking “elite” to “business families” makes sense in this first pass investigation. The ensuing suboptimal capital allocation could substantially retard economic growth (Olson, 1965, Acemoglu et al., 2005, Morck et al., 2005, Perotti and Volpin, 2007, Stulz, 2005 and Fogel et al., 2008). Consistent with elite capture, we find less efficient capital allocation amid worse economy performance in countries whose banking systems are more predominantly controlled by wealthy tycoons or business families. Caprio, Laeven, and Levine (2007) find that banks whose controlling shareholders have large cash flow rights outperform widely held banks. However, a wedge separates efficient bank governance at the bank and economy-levels (Saunders, Strock, and Travlos, 1990). For example, aggressively gaming deposit insurance or bailouts might raise bank shareholder value but harm the overall economy, and “excessive” bank CEO risk aversion (Kane, 1985; John, Litov, and Yeung, 2008) that depresses shareholder value might be socially preferable (Laeven and Levine, 2009). Furthermore, loans that finance technology, infrastructure, or other investments with positive spillovers (Jaffe, 1986 and Nadiri and Mamuneas, 1994) may augment social welfare even if the borrowers default. Such externalities argue for state-control (Lewis, 1969), but empirical work shows “government failure” eclipsing any benefits (Dornbusch and Edwards, 1992, Krueger, 2002, La Porta et al., 2002 and Dinc, 2005). Nonetheless, these considerations make bank-level performance an unreliable indicator of economy-level implications of bank control. The effect of tycoon or family control over banks on economy-level capital allocation efficiency is not prima facie obvious. Schumpeter (1912) argues that the prospect of founding a private dynasty motivates entrepreneurial effort. Shleifer and Vishny (1986) argue that large shareholders limit agency problems (Jensen and Meckling, 1976), and the most common controlling shareholders in most countries are wealthy families (La Porta, Lopez-de-Silanes, and Shleifer, 1999), and this is also true for banks (Caprio, Laeven, and Levine, 2007). Family control can be a feasible second best, absent legal systems that protect passive investors (Burkart, Panunzi, and Shleifer, 2003), because business families might resist predatory governments (Fisman and Khanna, 2004) or have valuable reputational capital and relationship networks (Khanna and Palepu, 2000, Khanna and Yafeh, 2005 and Khanna and Yafeh, 2007). In most countries, wealthy business families use pyramiding, dual class shares, and other control enhancement devices (Bebchuk, Kraakman, and Triantis, 2000) to direct large “business groups”, each containing many listed firms (La Porta et al., 1999 and Morck et al., 2000) in many different industries (Khanna et al., 2000, Khanna and Palepu, 2000, Khanna and Rivkin, 2001, Khanna and Yafeh, 2005 and Khanna and Yafeh, 2007). Morck and Nakamura (2007) use Meiji Japan to illustrate how large family-controlled business groups might effect “big push” industrialization (Rosenstein-Rodan, 1943 and Murphy et al., 1989) using “tunneling” (Johnson, La Porta, Lopez-De-Silanes, and Shleifer, 2000) to coordinate capital investment and orchestrate cross-industry subsidies, as an idealized central planner would. All else equal, these explanations point to more efficient capital allocation in countries whose banking systems are more thoroughly controlled by tycoons or business families. In opposition to these stand several less beneficent explanations of family control over countries’ banking systems. Family-controlled banks might pass from talented founders to less able heirs (Morck et al., 2000, Smith and Amoako-Adu, 2005, Perez-Gonzalez, 2006 and Bennedsen et al., 2007), or might elicit reduced effort from employees who know top positions are reserved for family (Aronoff and Ward, 2000). Large shareholders can become entrenched (Morck et al., 1988 and Stulz, 1988), extract private benefits of control (Nenova, 2003 and Dyck and Zingales, 2004), and generate a host of agency problems (Bebchuk et al., 2000 and Djankov et al., 2006). Banks in business groups can thus be exposed to vastly magnified agency problems (Bebchuk, Kraakman, and Triantis, 2000) that divert capital towards other group member firms (Almeida and Wolfenzon, 2006a) or losses into group banks when governments bail out banks but not other firms (Perotti and Vorage, 2008 and Perotti and Volpin, 2007). Families could use banks to limit capital to potential competitors, and this could motivate family control of banks regardless of whether or not this is efficient. There are other barriers to entry such as regulation (Djankov, La Porta, Lopez-de-Silanes, and Shleifer, 2002), tax favors (Gentry and Hubbard, 2000), subsidies (Krueger, 2002), and trade barriers (Krueger, 1974 and Krueger, 2004). However, entrants’ most critical need is arguably capital (Schumpeter, 1912, Levine, 1991, Levine, 1992, King and Levine, 1993a, King and Levine, 1993b and Beck et al., 2000), so controlling the financial sector could let an established business elite protect its nonfinancial firms from entrants (Rajan and Zingales, 2003, Rajan and Zingales, 2004, Morck et al., 2005 and Perotti and Vorage, 2008) more directly than alternative approaches, such as ongoing political rent-seeking (Krueger, 1974) or keeping relatives in key government positions (Faccio, 2006 and Faccio et al., 2006). A dynamic banking system correlates with sustained prosperity (King and Levine, 1993a) and the ready financing of entrants (Beck, Demirgüç-Kunt, and Maksimovic, 2008), so elite capture of a country’s financial system could plausibly be critically incomplete without control over its banks. We therefore focus on banks. All else equal, these explanations posit worse capital allocation in countries whose banking systems are more thoroughly controlled by tycoons or business families. To explore these issues, we measure the fraction of each country’s largest banks, listed and unlisted, that is ultimately controlled by a tycoon or business family, state-controlled, or widely held. For brevity, we refer to the first as family-controlled. Controlling for banking system size, stock market size, and other relevant factors, we find more predominantly family-controlled banking systems correlated with less efficient capital allocation. This result holds regardless of whether we gauge capital allocation quality as in Rajan and Zingales (1998), as in Wurgler (2000), or by nonperforming loans; and survives a comprehensive battery of robustness checks. The efficiency loss is highly economically significant, and comparable to that associated with state-controlled banking systems (Wurgler, 2000, La Porta et al., 2002, Caprio et al., 2007 and Taboada, 2008). However, family-controlled banking systems also correlate with financial instability and inequality, while state-controlled banking systems do not. Family-controlled banking thus correlates with both worse inefficiency and worse inequality, escaping the classic welfare economics trade-off between the two. We cannot preclude reverse causation or missing latent variables absolutely. Neither event studies nor Granger causality tests are viable because our banking sector control group variables exhibit almost no time variation. Also, the number of control variables we can use is limited because we must use country-level variables, most of which are highly persistent. Finally, commonly used instruments, such as legal origin and majority religion, are unlikely to act exclusively through banking system control. Nonetheless, a range of circumstantial evidence argues against exclusively reverse causality. We tentatively conclude that entrusting the control of large banks to tycoons or old-moneyed business families provides capital allocation efficiency losses comparable to those associated with state-controlled banking, augmented by the inequality consequences associated with crony capitalism. Of course, our results imply neither that tycoon and family control is always inefficient, nor that banking systems predominantly controlled by tycoons or families always harm their countries. Our results do, however, flag such beneficent cases as atypical and therefore especially deserving of study.
نتیجه گیری انگلیسی
Who controls a country’s banks matters. Controlling for capital market development and initial GDP per capita, we find that national banking systems entrusted more predominantly to tycoons and business families (called family controlled for brevity) correlate with worse economy-level outcomes: less efficient capital allocation, more nonperforming loans, more frequent bank crises, greater macro volatility, and slower income and productivity growth rates. Our findings support the thesis of Rajan and Zingales (2003) that an initial cadre of entrepreneurs (or their heirs), made rich by their country’s newly developed financial system, subsequently seek to reverse that development to lock in their dominance by limiting entrants’ access to external capital. Because cross-country empirical evidence suggests that banks provide essential capital for new and small firms (Beck, Demirgüç-Kunt, and Maksimovic, 2008), control over the banking system is a likely place to look for this effect. Consistent with these arguments, we find family control over banks correlated with traditional signs of crony capitalism, such as high inequality and barriers to entry. Moreover, our findings emphasize family control of the banking system specifically, rather than their control of large businesses in general. That control of the financial system is especially critical supports the thesis of Rajan and Zingales, 2003 and Rajan and Zingales, 2004: incumbent elites might lock in the status quo by blocking upstarts’ and competitors’ access to outside capital. However, family control over banking is quite likely only part of the story, and further work exploring the importance of pyramidal business groups and their influence over other sources of capital might well be fruitful. Of course, our findings imply neither that all controlling tycoons and families are entrenched nor that their control has these associations in all time periods and all financial crises. Rather, they render cases where the opposite result occurs especially intriguing. Finally, our findings call for further corporate finance research into “elite capture”; wherein a minority religious group, ethnic group, or economic elite controls an economic, political, or other institution to advance the minority’s interests, rather than general social welfare (Glaeser et al., 2003 and Hellman et al., 2003; and others). Elite capture of a country’s financial system may well be an important element of “crony capitalism” (e.g. Murphy et al., 1991, Murphy et al., 1993, Shleifer and Vishny, 1993, Shleifer and Vishny, 1998, Haber, 2002, Krueger, 2002, Rajan and Zingales, 2004, Morck et al., 2005, Acemoglu et al., 2005, Daniels and Trebilcock, 2008 and Fisman and Miguel, 2008) that underlies financial development reversals specifically (Rajan and Zingales, 2003 and Rajan and Zingales, 2004) and persistent financial underdevelopment more generally (King and Levine, 1993a and King and Levine, 1993b).