Politicians and banks: Political influences on government-owned banks in emerging markets

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526 Scopus citations


Government ownership of banks is very common in countries other than the United States. This paper provides cross-country, bank-level empirical evidence about political influences on these banks. It shows that government-owned banks increase their lending in election years relative to private banks. This effect is robust to controlling for country-specific macroeconomic and institutional factors as well as bank-specific factors. The increase in lending is about 11% of a government-owned bank's total loan portfolio or about 0.5% of the median country's GDP per election per government-owned bank.

Original languageEnglish (US)
Pages (from-to)453-479
Number of pages27
JournalJournal of Financial Economics
Issue number2
StatePublished - Aug 2005
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics
  • Strategy and Management


  • Corporate governance
  • Corruption
  • Electoral cycle
  • Political economy
  • State-owned enterprises


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