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Corporate governance, bank concentration and economic growth

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  • Diallo, Boubacar

Abstract

We examine the effects of bank concentration and corporate governance among firms in terms of economic growth using panel data for 34 countries and 29 manufacturing sectors over the period 1980–2010. We show the following results: First, bank concentration exerts a negative effect on growth for industries that are most dependent on external financing. However, for countries with a high level of corporate governance bank concentration is less harmful to economic growth. Our results have important policy implications for emerging markets. Most importantly, they suggest that high corporate governance is a crucial means for promoting growth and prosperity in developing and emerging economies, in which we commonly observe under-developed financial sectors and high levels of bank concentration.

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  • Diallo, Boubacar, 2017. "Corporate governance, bank concentration and economic growth," Emerging Markets Review, Elsevier, vol. 32(C), pages 28-37.
    • Handle: RePEc:eee:ememar:v:32:y:2017:i:c:p:28-37
    DOI: 10.1016/j.ememar.2017.05.003
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    Cited by:

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    3. Legaspe Francisco, 2023. "Effect of corruption on economic growth," Asociación Argentina de Economía Política: Working Papers 4663, Asociación Argentina de Economía Política.
    4. Mittal, Amit & Garg, Ajay Kumar, 2018. "Bank stocks inform higher growth – A System GMM analysis of ten emerging markets in Asia," MPRA Paper 98253, University Library of Munich, Germany.
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    More about this item

    Keywords

    Corporate governance; Bank concentration; Financial dependence; Growth;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G2 - Financial Economics - - Financial Institutions and Services
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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