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

Natalia Utrero-González

doi:10.1016/j.qref.2006.02.006

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

Natalia Utrero-González

Research output: Contribution to journal › Article › Research › peer-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 language	English
Pages (from-to)	481-506
Journal	Quarterly Review of Economics and Finance
Volume	47
Issue number	4
DOIs	https://doi.org/10.1016/j.qref.2006.02.006
Publication status	Published - 1 Sep 2007

Keywords

Banking regulation
Capital structure
Investor protection

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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. {\textcopyright} 2006 Board of Trustees of the University of Illinois.",

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AB - 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.

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KW - Capital structure

KW - Investor protection

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