Media ownership, concentration and corruption in bank lending

Joel F. HOUSTON, Chen LIN, Yue MA

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

53 Citations (Scopus)

Abstract

Building on the pioneering study by Beck, Demirguc-Kunt, and Levine (2006), this study examines the effects of media ownership and concentration on corruption in bank lending using a unique World Bank data set covering more than 5,000 firms across 59 countries. We find strong evidence that state ownership of media is associated with higher levels of bank corruption. We also find that media concentration increases corruption both directly and indirectly through its interaction with media state ownership. In addition, we find that media state ownership and media concentration both accentuate the positive link between official supervisory power and lending corruption and attenuate the negative link between the regulations that empower private monitoring and corruption in lending. Media state ownership or media concentration also accentuates the positive link between banking concentration and corruption in lending. Furthermore, the links between media structure and corruption are more pronounced when the borrowing firm is privately owned.
Original languageEnglish
Pages (from-to)326-350
Number of pages25
JournalJournal of Financial Economics
Volume100
Issue number2
DOIs
Publication statusPublished - 1 May 2011

Fingerprint

Corruption
Bank lending
Ownership concentration
Media ownership
State ownership
Lending
World Bank
Borrowing
Banking
Pioneering
Private monitoring
Interaction

Keywords

  • Bank lending
  • Bank supervision
  • Corruption
  • Media concentration
  • Ownership

Cite this

HOUSTON, Joel F. ; LIN, Chen ; MA, Yue. / Media ownership, concentration and corruption in bank lending. In: Journal of Financial Economics. 2011 ; Vol. 100, No. 2. pp. 326-350.
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Media ownership, concentration and corruption in bank lending. / HOUSTON, Joel F.; LIN, Chen; MA, Yue.

In: Journal of Financial Economics, Vol. 100, No. 2, 01.05.2011, p. 326-350.

Research output: Journal PublicationsJournal Article (refereed)Researchpeer-review

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AB - Building on the pioneering study by Beck, Demirguc-Kunt, and Levine (2006), this study examines the effects of media ownership and concentration on corruption in bank lending using a unique World Bank data set covering more than 5,000 firms across 59 countries. We find strong evidence that state ownership of media is associated with higher levels of bank corruption. We also find that media concentration increases corruption both directly and indirectly through its interaction with media state ownership. In addition, we find that media state ownership and media concentration both accentuate the positive link between official supervisory power and lending corruption and attenuate the negative link between the regulations that empower private monitoring and corruption in lending. Media state ownership or media concentration also accentuates the positive link between banking concentration and corruption in lending. Furthermore, the links between media structure and corruption are more pronounced when the borrowing firm is privately owned.

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