Banking regulation, institutional framework and capital structure: International evidence from industry data

Natalia Utrero-González

    Research output: Contribution to journalArticleResearchpeer-review

    22 Citations (Scopus)

    Abstract

    This paper investigates the degree to which banking regulation and institutional environment affects corporate finance choices. La Porta et al. (1997) and (1998) have shown the effects of investor protection on financing decisions. We extend these measures of investor protection and develop a new measure for banking regulation. We find that prudential banking regulation is positively associated with industry indebtedness, indicating that prudential rules make it easier for firms to access credit markets. Furthermore, we also find a significant effect of disclosure requirements on leverage decisions. © 2006 Board of Trustees of the University of Illinois.
    Original languageEnglish
    Pages (from-to)481-506
    JournalQuarterly Review of Economics and Finance
    Volume47
    Issue number4
    DOIs
    Publication statusPublished - 1 Sep 2007

    Keywords

    • Banking regulation
    • Capital structure
    • Investor protection

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