Competition and Agency Problems Within Banks: Evidence From Insider Lending
Autor: | Mattia Girotti, Federica Salvadè |
---|---|
Rok vydání: | 2020 |
Předmět: |
History
Measure (data warehouse) 050208 finance Polymers and Plastics Strategy and Management 05 social sciences Principal–agent problem Financial system Monetary economics Competitor analysis Management Science and Operations Research Industrial and Manufacturing Engineering Insider Competition (economics) Identification (information) Deregulation 0502 economics and business Agency (sociology) Profitability index Business Business and International Management 050207 economics |
Zdroj: | SSRN Electronic Journal. |
ISSN: | 1556-5068 |
DOI: | 10.2139/ssrn.3550108 |
Popis: | This paper studies whether greater competition can mitigate agency problems within banks. We measure the intensity of the agency conflict within a bank by the volume of loans that the bank lends to its insiders (e.g., executives). We first check that these loans are a form of private benefit. By exploiting interstate branching deregulation, we then show that banks react to greater competition by reducing insider lending, especially when the entry of new competitors may more strongly affect bank profitability. Results are robust to using various identification approaches and alternative indicators of agency conflict. We conclude that competitive pressure reduces managerial self-dealing. This paper was accepted by Gustavo Manso, finance. |
Databáze: | OpenAIRE |
Externí odkaz: |