Get documents about "Credit Information Sharing_ Creditor Protection and Ban Cross
Document Sample
Table 1: Variable definition and data sources
Variable Definition Sources
Panel A Variables on M&As
Cross-border Number The aggregated number of bank’s cross-border consolidations in each country pair. Authors’ calculations using
data from SDC Platinum
Cross-border Probability A dummy variable which takes on value one if there is a cross-border M&A between the country pair. Authors’ calculations using
data from SDC Platinum
Panel B Variables on Credit Institutions
A variable equals one if either a public registry or a private bureau operates in the country by the end of
Information Sharing Djankov et al. (2007)
2003, zero otherwise.
A dummy variable which takes on value one if a public credit registry operates in the country by the end of
Public Registry Djankov et al. (2007)
2003, zero otherwise.
A dummy variable which takes on value one if a private credit bureau operates in the country by the end of
Private Bureau Djankov et al. (2007)
2003, zero otherwise.
Black and White Miller (2003)
A dummy equals one if the public registry reports both black and white information, and 0 otherwise.
Information (Public) Jappelli and Pagano (2002)
Black Information Only Miller (2003)
A dummy equals one if the public registry only reports black information, and 0 otherwise.
(Public) Jappelli and Pagano (2002)
Black and White Miller (2003)
A dummy equals one if the private bureau reports both black and white information, and 0 otherwise.
Information (Private) Jappelli and Pagano (2002)
Black Information Only Miller (2003)
A dummy equals one if the private bureau only reports black information, and 0 otherwise.
(Private) Jappelli and Pagano (2002)
Public Registry Age The years of establishment since the starting date of the public credit registry. Djankov et al. (2007)
Private Bureau Age The years of establishment since the starting date of oldest private credit bureau in the country. Djankov et al. (2007)
The index measures the power of secured lenders in bankruptcy. A score of one is assigned when each of
the following rights of secured lenders is defined in laws and regulations: First, there are restrictions, such
as creditor consent, for a debtor to file reorganization. Second, secured creditors are able to seize their
Creditor Rights collateral after the reorganization petition is approved. Third, secured creditors are paid first out of the Djankov et al. (2007)
proceeds of liquidating a bankrupt firm. Last, management does not retain administration of its property
pending the resolution of the reorganization. The index ranges from 0 to 4. Higher value indicates stronger
creditor rights.
The number of days to resolve a payment dispute through courts. The data describe the number of
Enforcement Days calendar days to enforce a contract of unpaid debt worth 50% of the country’s GDP per capita. The Djankov et al. (2007)
variable is constructed as at Jan. 2003.
Panel C Bank Control Variables
35
Capital Requirement Index indicates (1) is the minimum capital-asset ratio requirement risk weighted in line with the Basel
guidelines (Yes=1; No=0); (2) does the minimum ratio vary as a function of market risk (Yes=1; No=0); (3)
are the sources of funds to be used as capital verified by the regulator/supervisory authorities (Yes=1; Barth et al. (2006)
No=0). Higher values indicate greater stringency.
Official supervisory Index of supervisory power of banking supervisors that has been computed as the sum of 1-0-dummies,
power capturing the following aspects: (1) Can the supervisory agency order directors/management to constitute
provisions to cover actual/potential losses? (2) Can the supervisory agency supersede bank shareholder Authors’ calculations using
rights and declare bank insolvent? (3) Can the supervisory agency suspend dividends? (4) Can supervisory data from Barth et al. (2006)
agency suspend bonuses? (5) Can supervisory agency suspend management fees? The index ranges from 0
to 5.
Independence of The degree to which the supervisory authority is independent from the government and legally protected
supervisory authority from the banking industry. The variable is based on two questions: (1)to whom are the supervisory bodies
responsible or accountable (=1 if the response is a legislative body, =0 otherwise); (2)whether or not Barth et al. (2006)
supervisors are legally liable for their actions (Yes=0, No=1). Higher values signify greater independence.
Government Ownership The fraction of the banking system’s assets in the banks that are 50 percent or more owned by government.
Barth et al. (2006)
Foreign Ownership The fraction of the banking system’s assets in the banks that are 50 percent or more owned by foreigners.
Barth et al. (2006)
Entry Barrier Entry into Banking Requirement, which is a variable developed based on eight questions regarding whether
various types of legal submission are required to obtain a banking license. Which of the following are
legally required to be submitted before issuance of the banking license? (1)Draft by-laws? (2)Intended
organization chart? (3) Financial projections for first three years? (4) Financial information on main Authors’ calculations using
potential shareholders? (5) Background/experience of future directors? (6) Background/experience of data from Barth et al. (2006)
future managers? (7) Sources of funds to be disbursed in the capitalization of new bank? (8) Market
differentiation intended for the new bank? The index ranges from 0 (low entry requirement) to 8 (high
entry requirement). Higher values indicate greater stringency
Application Denied The percentage of denied applications for commercial bank licenses from domestic and foreign entities. Barth, Lin, Lin and Song
(2009)
Herfindahl-Hirschman The sum of the squares of the market shares (deposit) of each individual bank in individual countries in the Barth, Lin, Lin and Song
Index (HHI) sample in 1999. The (normalized) value of HHI ranges from 0 to 1. (2009)
Panel D Corporate Governance Control Variables
A measure of the effective rights of minority shareholders, computed as the product of rule of law and
Shareholder Rights anti-director rights, divided by ten. It ranges between zero and six. Higher values signify stronger La Porta et al. (1998)
shareholder protection.
36
A measure represents investors’ assessments of conditions in the country. Assessment of the ‘‘efficiency
Judicial Efficiency and integrity of the legal environment as it affects business, particularly foreign firms’’ produced by the La Porta et al. (1998)
country risk rating agency. It scales from zero to 10. Higher values indicate higher level of efficiency.
Panel E Governance Indicators
The quality of public services, the quality of the civil service and the degree of its independence from
Government
political pressures, the quality of policy formulation and implementation, and the credibility of the Kaufmann et al. (2006)
Effectiveness
government’s commitment to such policies. Higher value indicates better government outcomes.
The extent to which agents have confidence in and abide by the rules of society, and in particular the
Rule of Law quality of contract enforcement, the police, and the courts, as well as the likelihood of crime and violence. Kaufmann et al. (2006)
Higher value indicates better government outcomes.
The extent to which public powers is exercised for private gain, including both pretty and grand forms of
Control of Corruption corruption, as well as “capture” of the state of elites and private interests. Higher value indicates better Kaufmann et al. (2006)
government outcomes.
Panel F Macroeconomic Control Variables
Common law Equals one if the origin of the company law is the English common law and zero otherwise. La Porta et al. (1998)
Same language Equals one when target and acquirer’s countries share the same main language and zero otherwise. World Atlas 1995
Same Location Equals one when target and acquirer’s countries are from the same continent and zero otherwise. We
classify all countries into seven areas (Africa, North America, South America, Asia, Australia-ocean, World Atlas 1995
Middle-east and Europe ).
Same Law Equals one when target and acquirer’s countries have the same legal origin and zero otherwise. World Atlas 1995
GNI Logarithm of GNI (current US dollars), averaging 1998-2007. IMF 2008
GDP per capita Growth Average annual growth rate in GDP per capita from 1998-2007. IMF 2008
FDI Foreign direct investment in a country (current US billion dollars), averaging 1998-2007. World Development
Indicators (WDI)
Import Imports of goods and services as percentage of GDP, 2003. World Development
Indicators (WDI)
Export Exports of goods and services as percentage of GDP, 2003. World Development
Indicators (WDI)
37
Table 2: Summary Statistics of Key Variables
Standard
Observation Mean Minimum Maximum
Deviation
Dependent
Cross-border Number 3306 0.392 1.580 0 26
Cross-border Probability 3306 0.081 0.273 0 1
Independent
A. Information Sharing
Information sharing 58 0.918 0.277 0 1
Public Registry 58 0.449 0.503 0 1
Private Bureau 58 0.735 0.446 0 1
Black and White Information
58 0.041 0.200 0 1
(Public)
Black Information Only
58 0.286 0.456 0 1
(Public)
Black and White Information
58 0.245 0.434 0 1
(Private)
Black Information Only
58 0.367 0.487 0 1
(Private)
Public Registry Age 58 10.388 16.642 0 65
Private Bureau Age 58 18.918 21.509 0 98
B. Creditor Rights
Creditor Rights 58 0.347 0.481 0 1
Enforcement Days 58 5.559 0.699 3.871 7.237
Controls
GNI 58 25.819 1.501 22.649 29.876
GDP Growth 58 1.983 1.604 -1.500 5.763
Import 56 34.768 21.881 8.691 123.053
Export 56 35.984 25.210 9.411 128.320
FDI 57 20.988 47.530 -1.866 289.443
Capital Requirement 48 4.439 1.550 1 7
Supervisory Power 55 10.798 2.589 5 14
Independence of Supervision 50 0.5349 0.505 0 1
Government Ownership 54 15.662 19.849 0 75.27
Foreign Ownership 40 22.533 22.351 0 99.11
Entry Barrier 50 7.093 1.556 0 8
Application Denied 37 22.160 26.312 0 91.666
HHI 46 0.236 0.161 0.045 0.669
Shareholder Rights 49 2.066 1.3111 0 5
Judicial System 49 7.485 2.309 0.09 10
Rule of Law 58 61.568 30.336 2.857 99.523
Government Effectiveness 52 10.038 1.251 8 13
Control of Corruption 52 10.307 1.393 8 13
38
Table 3: Bank Cross-border Numbers (CBN) and Credit Institutions by County
Panel A describes data on bank cross-border M&A activities in 58 countries in the period 1990 to
2007, in which there are 33 developing countries and 25 advanced countries. It also reports the
information sharing institutions and creditor rights scores by 2003. Panel B provides the t-test on the
differences between different country developments and between cross-border numbers as target and
as acquirer. CBN=Cross-Border Number; DEV=Developing Countries; ADV=Advanced Countries.
*,**,*** represent statistical significance at the 10%, 5%, and 1% level respectively.
Panel A: Data on bank cross-border activity and credit institutions
Public Private Information Creditor
CBN as CBN as
Country Registry by Bureau by Sharing by Rights by
Target Acquirer
2003 2003 2003 2003
Armenia 4 0 0 0 0 2
Australia 24 20 0 1 1 3
Austria 12 6 1 1 1 3
Azerbaijan 1 0 0 0 0 3
Belgium 23 47 1 1 1 2
Brazil 33 9 1 1 1 1
Bulgaria 12 1 0 0 0 2
Canada 14 37 0 1 1 1
Chile 13 1 1 1 1 2
Colombia 11 2 0 1 1 0
Denmark 13 13 0 1 1 3
Ecuador 1 0 1 0 1 0
Egypt, Arab Rep. 8 0 1 0 1 2
Finland 9 5 0 1 1 1
France 39 74 1 0 1 0
Germany 63 81 1 1 1 3
Greece 7 9 0 1 1 1
Hong Kong, China 20 12 0 1 1 4
India 6 2 0 0 0 2
Indonesia 30 0 1 0 1 2
Ireland 20 9 0 1 1 1
Israel 1 3 0 1 1 3
Italy 46 31 1 1 1 2
Japan 13 13 0 1 1 2
Jordan 1 0 1 0 1 1
Kazakhstan 6 4 0 0 0 2
Kenya 1 0 0 1 1 4
Korea, Rep. 9 4 1 0 1 2
Lithuania 8 3 0 0 0 2
Malawi 1 0 1 1 1 3
Malaysia 4 7 0 1 1 0
Mexico 20 5 0 1 1 3
39
Netherlands 26 73 0 1 1 3
New Zealand 8 5 1 0 1 4
Nigeria 2 0 0 1 1 2
Norway 14 7 1 0 1 1
Pakistan 4 1 1 1 1 0
Peru 2 0 0 1 1 0
Philippines 20 1 1 1 1 1
Portugal 21 12 0 0 0 2
Romania 20 0 0 0 0 2
Russian Federation 33 32 0 0 0 3
Singapore 4 28 0 1 1 3
South Africa 4 12 0 1 1 3
Spain 27 69 1 1 1 2
Sri Lanka 2 0 0 1 1 2
Sweden 16 20 0 1 1 1
Switzerland 23 51 0 1 1 1
Taiwan, China 20 4 1 1 1 2
Thailand 13 0 0 0 0 2
Turkey 21 6 1 0 1 2
Ukraine 27 5 0 0 0 2
United Kingdom 69 83 0 1 1 4
United States 142 137 0 1 1 1
Uruguay 7 0 1 1 1 3
Venezuela, RB 3 0 1 0 1 3
Zimbabwe 4 0 0 0 0 4
Panel B: T-test
CBN as CBN as
By Development By Target and Acquirer DEV ADV
Target Acquirer
DEV 10.606 2.939 CBN as Target 10.606 5.828
ADV 26.960 33.960 CBN as Acquirer 2.939 6.907
t-test: DEV vs. ADV -2.984*** -5.073*** t-test: Target vs. Acquirer 4.774*** -1.961**
40
Table 4: Credit Institutions by Development
This table summarizes the means of credit institutions: information sharing and creditor rights. It
also provides three types of credit institution variables that are not included in DMS (2007): the
information content disclosed, information bureau age, and the contract enforcement days. See Table
1 for variable definitions. The data are sorted by country development and t-tests on the differences
between developing and advanced countries are provided. DEV=Developing Countries;
ADV=Advanced Countries. *,**,*** represent statistical significance at the 10%, 5%, and 1% level
respectively.
Panel A: Information Sharing
Public Private Information Black Both Black Both Public Private
By Development
2003 2003 Sharing (Public) (Public) (Private) (Private) Age Age
DEV 0.424 0.455 0.667 0.030 0.454 0.090 0.151 7.515 10.484
ADV 0.360 0.840 0.960 0.04 0.08 0.36 0.52 10.6 23.24
DEV vs. ADV
2.49*** -3.20*** -2.874*** -0.197 3.34*** -2.61*** -3.212*** -0.737 -2.394***
(t-test)
Panel B: Creditor Rights
Creditor Rights by 2003 Enforcement Days
DEV 1.939 5.867
ADV 2.16 5.152
DEV vs. ADV (t-test) -2.748*** 4.448***
41
Table 5: Creditor Information Sharing, Creditor Rights and Bank’s Cross-border Consolidation
The table presents the results of six Tobit models estimated by maximum likelihood on the sample of 58 countries. See Table 1 for variable definitions.
The dependent variable is the Cross-border Number. The coefficient estimates are transformed to represent the marginal effects evaluated at the means
of the independent variables from the interval regressions. The marginal effects of a dummy variable is calculated as the discrete change in the expected
value of the dependent variable as the dummy variable changes from 0 to 1. The heteroskedasticity-robust standard errors are presented in brackets.
*,**,*** represent statistical significance at the 10%, 5%, and 1% level respectively.
(1) (2) (3) (4) (5) (6) (7) (8)
Information Sharing _t 2.578** 2.400** 2.064*
(1.215) (1.218) (1.221)
Information Sharing _a 2.728** 2.597* 2.032
(1.417) (1.452) (1.451)
Public Registry _t 1.275**
(0.607)
Public Registry _a 1.245**
(0.681)
Private Bureau _t 1.646**
(0.764)
Private Bureau _a 0.183
(0.798)
Black and White Information (Public) _t 1.902***
(0.671)
Black and White Information (Public) _a 0.807
(0.785)
Black Information Only (Public) _t 1.854
(1.323)
Black Information Only (Public) _a 0.791
(1.205)
Black and White Information (Private) _t 1.387
(0.834)
Black and White Information (Private) _a 0.739
(0.763)
Black Information Only (Private) _t 2.834***
42
(0.870)
Black Information Only (Private) _a -1.250
(0.947)
Public Registry Age _t 0.013
(0.017)
Public Registry Age _a 0.029*
(0.017)
Private Bureau Age _t 0.039***
(0.014)
Private Bureau Age _a 0.029*
(0.016)
Creditor Rights _t 0.474** 0.317**
(0.252) (0.148)
Creditor Rights _a 0.341 0.121
(0.330) (0.307)
CR_2: No Automatic Stay _t 1.519*** 1.078**
(0.512) (0.509)
CR_2: No Automatic Stay _a 1.301*** 1.157**
(0.590) (0.560)
Enforcement Days _t -0.872** -0.976*** -0.807*** -1.148***
(0.384) (0.365) (0.262) (0.414)
Enforcement Days _a -0.246 -0.174 -0.797*** -0.227
(0.387) (0.347) (0.248) (0.414)
Control Variable
Same Location 3.519*** 3.120*** 3.233*** 3.383*** 3.155*** 3.238*** 3.461*** 3.500***
(0.547) (0.561) (0.559) (0.569) (0.564) (0.559) (0.547) (0.544)
Same Language 2.156*** 1.969*** 1.975*** 1.872*** 2.010*** 1.917*** 2.133*** 1.985***
(0.736) (0.780) (0.774) (0.760) (0.781) (0.772) (0.739) (0.738)
Same Law 1.169*** 1.289*** 1.335*** 1.299*** 1.275*** 1.285*** 1.165*** 1.187***
(0.496) (0.511) (0.510) (0.504) (0.512) (0.509) (0.497) (0.496)
Common Law _t 1.026 1.328* 1.702* 1.091 -0.402 0.011 0.638 0.785
(0.793) (0.802) (0.808) (0.781) (0.772) (0.714) (0.846) (0.791)
43
Common Law _a 0.101 0.373 0.066 0.476 -0.685 -0.323 -0.108 -0.069
(0.768) (0.740) (0.754) (0.758) (0.871) (0.732) (0.882) (0.769)
GNI _t 1.465*** 1.326*** 1.356*** 1.433*** 1.356*** 1.351*** 1.453*** 1.457***
(0.233) (0.280) (0.292) (0.319) (0.277) (0.276) (0.233) (0.233)
GNI _a 1.616*** 2.183*** 2.251*** 2.132*** 2.345*** 2.263*** 1.592*** 1.587***
(0.232) (0.333) (0.350) (0.368) (0.328) (0.324) (0.234) (0.232)
GDP Growth _t 0.362 0.301 0.352 0.173 0.153 0.218 0.331 0.307
(0.272) (0.292) (0.290) (0.281) (0.288) (0.290) (0.272) (0.273)
GDP Growth _a 0.601** -0.397 -0.385 -0.367 -0.435 -0.399 0.600** 0.470
(0.289) (0.362) (0.359) (0.362) (0.361) (0.360) (0.297) (0.300)
FDI _t 0.014*** 0.013 0.014*** 0.013*** 0.021*** 0.021*** 0.016*** 0.017***
(0.005) (0.005) (0.005) (0.005) (0.005) (0.005) (0.005) (0.005)
FDI _a 0.021*** 0.013 0.014*** 0.012*** 0.017*** 0.018*** 0.022*** 0.023***
(0.005) (0.005) (0.005) (0.005) (0.006) (0.005) (0.005) (0.005)
Import _t 0.024 0.089 0.127 0.067 0.071
(0.074) (0.072) (0.082) (0.073) (0.074)
Import _a -0.132** -0.140** -0.197** -0.179*** -0.183***
(0.062) (0.061) (0.076) (0.064) (0.064)
Export _t -0.031 -0.069 -0.100 -0.059 -0.067
(0.060) (0.059) (0.067) (0.060) (0.060)
Export _a 0.218*** 0.237*** 0.304*** 0.274*** 0.267***
(0.075) (0.075) (0.094) (0.078) (0.078)
Capital Requirement _t -0.049 -0.290 -0.302 -0.312 -0.141 -0.249 -0.090 -0.156
(0.172) (0.189) (0.203) (0.214) (0.195) (0.201) (0.175) (0.181)
Capital Requirement _a -0.486*** -0.262 -0.417* -0.041 -0.234 -0.068 -0.456*** 0.290
(0.179) (0.207) (0.237) (0.268) (0.235) (0.240) (0.195) (0.202)
Official Supervisory Power _t -0.534*** -0.529*** -0.521*** -0.448*** -0.552*** -0.559*** -0.530*** -0.520***
(0.111) (0.115) (0.118) (0.124) (0.118) (0.117) (0.112) (0.112)
Official Supervisory Power _a 0.068 0.085 0.048 0.121 0.003 -0.033 0.075 0.052
(0.110) (0.110) (0.114) (0.118) (0.113) (0.114) (0.110) (0.110)
Independence of Supervision _t 1.181** 0.685 0.041 1.264 0.815 0.560 1.134* 1.085*
(0.593) (0.670) (0.806) (0.706) (0.666) (0.660) (0.613) (0.595)
44
Independence of Supervision _a 1.029 0.931 1.486 0.151 0.265 0.363 1.090* 0.867
(0.626) (0.685) (0.785) (0.783) (0.648) (0.618) (0.626) (0.622)
Government Ownership _t -0.030** -0.011 -0.018 -0.001 -0.021 -0.019 -0.024* -0.025*
(0.014) (0.017) (0.017) (0.017) (0.015) (0.015) (0.013) (0.013)
Government Ownership _a 0.020 0.015 0.035** 0.023 0.006 0.011 0.028* 0.026*
(0.012) (0.015) (0.016) (0.015) (0.017) (0.017) (0.015) (0.014)
Entry Barrier _t 0.050 0.014 0.073 0.124 -0.188 -0.147 -0.007 -0.005
(0.173) (0.164) (0.173) (0.183) (0.176) (0.170) (0.179) (0.175)
Entry Barrier _a 0.187 0.048 0.022 0.121 -0.211 -0.189 0.168 0.120
(0.182) (0.188) (0.199) (0.210) (0.205) (0.193) (0.195) (0.189)
Shareholder Rights _t 0.357 0.327 0.637* 0.647** 0.698** 0.510 0.463 0.378
(0.281) (0.312) (0.348) (0.320) (0.319) (0.313) (0.293) (0.281)
Shareholder Rights _a -0.400 0.274 0.289 0.614* 0.453 0.251 0.335 0.337
(0.280) (0.330) (0.355) (0.347) (0.357) (0.329) (0.320) (0.280)
Judicial Efficiency _t 0.268** 0.259* 0.238* 0.248* 0.366*** 0.309** 0.302** 0.267**
(0.132) (0.138) (0.135) (0.140) (0.141) (0.137) (0.135) (0.132)
Judicial Efficiency _a 0.191 0.195 0.173 0.183 0.367*** 0.337*** 0.206 0.193
(0.135) (0.146) (0.140) (0.143) (0.144) (0.137) (0.139) (0.133)
Cons_ -91.89*** -102.38*** -106.89*** -105.17*** -98.97*** -94.92*** -90.68*** -88.65***
(10.281) (12.746) (13.254) (13.714) (12.751) (12.613) (10.343) (10.229)
Pseudo R^2 0.24 0.25 0.26 0.26 0.25 0.26 0.24 0.24
Observation 1560 1482 1482 1482 1482 1482 1560 1560
45
Table 6: Determinants of cross-border consolidations between banks by target country’s development
The table present results of six Tobit regressions. In (1) to (3), targets are from developing countries. In (4) to (6), targets are from advanced countries.
The dependent variable is the Cross-border Number. See Table 1 for variable definitions. The coefficient estimates are transformed to represent the
marginal effects evaluated at the means of the independent variables from the interval regressions. The marginal effects of a dummy variable is
calculated as the discrete change in the expected value of the dependent variable as the dummy variable changes from 0 to 1. The
heteroskedasticity-robust standard errors are presented in brackets. *,**,*** represent statistical significance at the 10%, 5%, and 1% level respectively.
Target is DEV Target is ADV
(1) (2) (3) (4) (5) (6)
Information Sharing _t 4.441*** 4.254*
(1.672) (2.536)
Information Sharing _a 0.055 3.773*
(1.425) (2.015)
Public Registry _t 3.033** 1.474
(1.516) (1.249)
Public Registry _a 0.308 1.629*
(0.798) (0.875)
Private Bureau _t 2.683** 1.603
(1.339) (1.342)
Private Bureau _a 0.366 -0.092
(1.033) (0.907)
Public Registry Age _t 0.080** 0.027
(0.035) (0.025)
Public Registry Age _a 0.006 0.060***
(0.020) (0.020)
Private Bureau Age _t 0.061* 0.034*
(0.034) (0.021)
Private Bureau Age _a 0.015 0.015
(0.017) (0.015)
Creditor Rights _t 0.181 0.313 -0.665 0.984*** 0.890** 0.995***
(0.437) (0.487) (0.496) (0.408) (0.430) (0.405)
Creditor Rights _a 0.325 0.082 -0.091 0.394 0.467 0.409
(0.297) (0.310) (0.320) (0.310) (0.321) (0.315)
46
Enforcement Days _t -0.647 -0.587 -0.692 -0.858** -0.874** -0.836**
(0.943) (0.838) (0.757 (0.387) (0.328) (0.335)
Enforcement Days _a -0.557 -0.638 -0.574 -0.243 -0.227 -0.282
(0.455) (0.473) (0.451) (0.388) (0.334) (0.391)
Control Variable
Same Location 1.484* 1.500 1.424 4.105*** 4.185*** 4.003***
(0.905) (0.997) (0.992) (0.753) (0.755) (0.764)
Same Language 1.817** 2.170** 2.486*** 1.249 1.047 0.980
(0.897) (0.954) (0.947) (1.110) (1.109) (1.092)
Same Law 1.017* 0.726 0.736 1.697*** 1.663*** 1.731***
(0.612) (0.616) (0.609) (0.704) (0.702) (0.695)
GNI _t 2.194*** 3.002*** 1.712*** 1.338** 1.275*** 0.956***
(0.657) (0.960) (0.635) (0.298) (0.308) (0.343)
GNI _a 0.928*** 1.570*** 1.703*** 1.916*** 1.747*** 1.374***
(0.286) (0.405) (0.434) (0.273) (0.286) (0.311)
GDP Growth _t 0.719** 0.862* 0.572* 0.971* 0.773 0.333
(0.350) (0.452) (0.338) (0.576) (0.543) (0.501)
GDP Growth _a 0.288 -0.581 -0.544 0.442 0.074 -0.032
(0.337) (0.424) (0.433) (0.383) (0.327) (0.327)
FDI _t 0.096* -0.140 0.125*** 0.022*** 0.022*** 0.023***
(0.050) (0.073) (0.049) (0.006) (0.006) (0.006)
FDI _a 0.018*** 0.006 0.003 0.025*** 0.026*** 0.027***
(0.006) (0.006) (0.006) (0.006) (0.006) (0.006)
Import _t 0.248* 0.053
(0.139) (0.121)
Import _a 0.211*** 0.238***
(0.090) (0.098)
Export _t -0.242** -0.008
(0.120) (0.108)
Export _a 0.116 0.134*
(0.075) (0.080)
Capital Requirement _t -1.156*** -1.454*** -0.446 -0.169 -0.309 -0.533*
47
(0.387) (0.520) (0.563) (0.286) (0.294) (0.293)
Capital Requirement _a -0.497** 0.303 0.241 0.127 -0.033 -0.068
(0.224) (0.285) (0.291) (0.247) (0.244) (0.244)
Official Supervisory Power _t -0.261 -0.420* -0.132 0.006 -0.052 0.171
(0.176) (0.257) (0.180) (0.179) (0.187) (0.191)
Official Supervisory Power _a -0.489*** -0.366*** -0.303** -0.345*** -0.360*** -0.239
(0.146) (0.139) (0.142) (0.150) (0.150) (0.155)
Government Ownership _t -0.019 -0.003 -0.040* -0.009 -0.011 -0.000
(0.014) (0.017) (0.022) (0.026) (0.027) (0.027)
Government Ownership _a -0.018 -0.007 0.008 -0.030 -0.034* -0.031
(0.018) (0.021) (0.021) (0.020) (0.020) (0.020)
Shareholder Rights _t 1.311** 1.552* 1.785** 0.753** 1.059** 0.984**
(0.640) (0.833) (0.896) (0.384) (0.480) (0.447)
Shareholder Rights _a 0.321 0.642 0.538 0.381 0.065 0.179
(0.332) (0.398) (0.429) (0.321) (0.356) (0.361)
Judicial Efficiency _t 0.288 0.279 0.283 0.460 0.276 0.496
(0.244) (0.226) (0.246) (0.295) (0.368) (0.337)
Judicial Efficiency _a 0.360** 0.357** 0.363** 0.021 0.162 0.155
(0.158) (0.153) (0.159) (0.179) (0.199) (0.186)
Cons_ -80.77*** -116.35*** -95.96*** -102.05*** -92.27*** -72.95***
(19.167) (26.774) (22.321) (13.619) (13.143) (12.992)
Pseudo R^2 0.24 0.26 0.26 0.26 0.26 0.26
Observation 741 722 722 819 819 819
48
Table 7: Governance motivation
The table presents results of five OLS regressions. The dependent variable is Cross-border Number.
(Variable)a-t represents the value difference of the variable between the acquirer and target
countries. See Table 1 for variable definitions. The heteroskedasticity-robust standard errors are
presented in brackets. *,**,*** represent statistical significance at the 10%, 5%, and 1% level
respectively.
(1) (2) (3) (4) (5)
(Information Sharing)a-t 0.08*** 0.08***
(0.03) (0.03)
(Public Registry)a-t 0.02 0.01
(0.03) (0.02)
(Private Bureau)a-t 0.07*** 0.08***
(0.02) (0.02)
(Creditor Rights)a-t 0.02 0.02 0.02
(0.02) (0.02) (0.02)
Control Variables
(GNI)a-t 0.02*** 0.02*** 0.02*** 0.02*** 0.02***
(0.01) (0.01) (0.01) (0.01) (0.01)
(GDP Growth)a-t -0.00 -0.00 0.00 -0.00 0.00
(0.01) (0.01) (0.01) (0.01) (0.01)
(Government Ownership)a-t -0.00 -0.00 -0.00 -0.00 -0.00
(0.00) (0.00) (0.00) (0.00) (0.00)
(Supervisory Power)a-t 0.02*** 0.02*** 0.01*** 0.01*** 0.01***
(0.01) (0.01) (0.00) (0.01) (0.00)
(Import)a-t 0.00 0.00 0.00 0.00 0.00
(0.00) (0.00) (0.00) (0.00) (0.00)
(Export)a-t -0.00 -0.00 -0.00 -0.00 -0.00
(0.00) (0.00) (0.00) (0.00) (0.00)
Same Language 0.15*** 0.15*** 0.15*** 0.15*** 0.15***
(0.05) (0.05) (0.05) (0.05) (0.05)
Same Location 0.36*** 0.36*** 0.36*** 0.36*** 0.36***
(0.03) (0.03) (0.03) (0.03) (0.03)
Same Law 0.06* 0.06* 0.06* 0.06* 0.06*
(0.03) (0.03) (0.03) (0.03) (0.03)
Constant 0.04* 0.05* 0.05* 0.05* 0.04*
(0.02) (0.03) (0.03) (0.03) (0.02)
Adjusted R^2 0.03 0.03 0.03 0.03 0.03
Observation 1482 1482 1482 1482 1482
49
Table 8: Difference-in-difference test
The table presents results of cross-sectional regressions for all countries that experienced reforms in credit institutions over 1990-2007. The dependent
variable is CBN, which is computed as Cross-border Number as target (t+5, t+4, t+3, t+2, t+1)-Cross-border Number as target (t-5, t-4, t-3, t-2,
t-1) and Cross-border Number as target (t+3, t+2, t+1)-Cross-border Number as target(t-3, t-2, t-1), where t is the year of reform. ΔCreditorRights
measures the difference in the creditor rights score (0 to 4) before and after reform. ΔCBNControl, is Cross-border Number as target (t+5, t+4, t+3,
t+2, t+1)-Cross-border Number as target (t-5, t-4, t-3, t-2, t-1) and Cross-border Number as target (t+3, t+2, t+1)-Cross-border Number as target(t-3,
t-2, t-1), between countries in which there was no reform during the window period around t. ΔCBNControl, in (1) and (5) refers to countries that did
not experience reforms in creditor rights during the window period around t; in (2) and (6) refers to countries that did not experience reforms in
information sharing system during the window period around t; in (3) and (7) refers to countries that did not experience reforms in public registry
during the window period around t; in (4) and (8) refers to countries that did not experience reforms in private bureau during the window period
around t. The heteroskedasticity-robust standard errors are presented in brackets. *,**,*** represent statistical significance at the 10%, 5%, and 1% level
respectively.
Panel A: X = 5 years Panel B: X = 3 years
(1) (2) (3) (4) (5) (6) (7) (8)
Creditor Information Public registry Private bureau Creditor rights Information Public registry Private bureau
rights sharing sharing
Independent variable
1.11 0.081**
ΔCreditorRights
(1.25) (0.04)
-0.005 -0.001 -0.015 -0.014 -0.001 -0.001 -0.002 -0.002
ΔCBNControl
(0.013) (0.01) (0.012) (0.012) (0.003) (0.006) (0.005) (0.01)
Constant 1.36 1.29* 4.20*** 1.05 -0.069 0.90* 0.77* 1.26
(1.72) (0.77) (1.81) (0.62) (0.25) (0.55) (0.45) (1.03)
Observation 23 31 23 17 27 34 26 18
Adjusted R^2 0.05 0.006 0.07 0.075 0.09 0.002 0.004 0.002
50
Table 9: Tobit regression with interaction terms
The table presents results of three Tobit regressions with interaction terms. The dependent variable
is Cross-border Number. See Table 1 for variable definition. The coefficient estimates are transformed
to represent the marginal effects evaluated at the means of the independent variables from the
interval regressions. The marginal effects of a dummy variable is calculated as the discrete change in
the expected value of the dependent variable as the dummy variable changes from 0 to 1. The
heteroskedasticity-robust standard errors are presented in brackets. *,**,*** represent statistical
significance at the 10%, 5%, and 1% level respectively.
(1) (2) (3) (4) (5)
Information Sharing 1.893** 3.594** 2.45** 3.157** 2.458*
(9.630) (1.786) (1.18) (1.399) (1.401)
Creditor Rights 0.12*** 0.326 2.003 2.442** 1.200*
(0.04) (0.339) (1.212) (1.159) (0.748)
Entry Barrier -0.210*
(1.284)
Application Denied -0.063*
(0.043)
HHI -0.30**
(0.11)
Judicial Efficiency 0.87***
(0.339)
Rule of Law 0.255
(0.211)
(Information Sharing)*(Entry Barrier) 0.226*
(1.321)
(Information Sharing)*(Application Denied) 0.079*
(0.043)
(Information Sharing)*(HHI) 0.41**
(0.11)
(Creditor Rights)*(Judicial Efficiency) 0.304**
(0.142)
(Creditor Rights)*(Rule of Law)
0.150*
Control Variables (0.093)
Capital Requirement -0.154 -0.320 -0.203 -0.370* -0.297
(0.184) (0.232) (0.181) (0.216) (0.198)
Supervisory Power -0.39*** -0.38*** -0.39*** -0.39*** -0.39***
(0.094) (0.110) (0.094) (0.095) (0.095)
Independence of Supervision 2.35*** 2.46*** 2.41*** 2.37*** 2.39***
(0.521) (0.624) (0.524) (0.523) (0.524)
Government Ownership 0.020 0.019 0.009 0.006 0.010
51
(0.013) (0.016) (0.013) (0.013) (0.014)
Same Location 4.10*** 3.56*** 4.25*** 4.20*** 4.12***
(0.575) (0.700) (0.587) (0.587) (0.585)
Same Language 2.36*** 2.30*** 2.11*** 2.15*** 2.17***
(0.760) (0.964) (0.771) (0.765) (0.774)
Same Law 0.968* 1.59*** 1.020* 1.056** 1.043**
(0.530) (0.635) (0.532) (0.533) (0.534)
Common Law 1.019* 1.248* 0.715 1.191* 1.115*
(0.609) (0.736) (0.608) (0.647) (0.667)
GNI 1.78*** 1.77*** 1.56*** 1.85*** 1.72***
(0.241) (0.274) (0.235) (0.234) (0.245)
GDP Growth 0.416 0.151 0.429 0.418 0.354
(0.320) (0.336) (0.290) (0.294) (0.306)
Import 0.012 0.001 -0.017 -0.010 -0.013
(0.019) (0.023) (0.018) (0.019) (0.019)
Cons_ -72.3*** -52.2*** -50.1*** -50.3*** -51.0***
(13.333) (8.130) (9.169) (6.932) (7.079)
Pseudo R^2 0.11 0.10 0.11 0.11 0.11
Observations 1641 1230 1641 1641 1641
52
Table 10: Robustness Test: Instrumental Variable Estimation Results
The table presents results of four IV test. Regressions (1) to (3) test for information sharing, and
regression (4) tests for creditor rights. The dependent variable is Cross-border Number. See Table 1 for
variable definitions. Legal origin, religion composition, and absolute value of latitude are used as
instrumental variables. The estimation is based on a consistent IV estimation of limited dependent
variable regressions. The coefficient estimates are transformed to represent the marginal effects
evaluated at the means of the independent variables from the interval regressions. The marginal
effects of a dummy variable is calculated as the discrete change in the expected value of the
dependent variable as the dummy variable changes from 0 to 1. The heteroskedasticity-robust
standard errors are presented in brackets. *,**,*** represent statistical significance at the 10%, 5%,
and 1% level respectively.
(1) (2) (3) (4) (5)
1.30** 0.08 0.12**
Information Sharing
(0.55) (0.60) (0.58)
0.28** 0.27*
Public Registry
(0.15) (0.16)
0.30* 0.30*
Private Bureau
(0.18) (0.18)
0.27** 0.19*
Creditor Rights
(0.11) (0.10)
Enforcement Days -0.684** -0.783**
(0.312) (0.264)
Control Variables
0.45*** 0.49*** 0.49*** 0.45*** 0.45***
Same Language
(0.15) (0.15) (0.15) (0.15) (0.15)
0.64*** 0.66*** 0.64*** 0.56*** 0.56***
Same Location
(0.11) (0.10) (0.10) (0.10) (0.10)
0.07 0.07 0.07 0.06 0.06
Same Legal Origin
(0.09) (0.08) (0.08) (0.08) (0.08)
0.35*** 0.32*** 0.31*** 0.36*** 0.36***
GNI _t
(0.05) (0.04) (0.04) (0.04) (0.04)
-0.03 -0.01 -0.02 -0.06* -0.06*
GDP g _t
(0.05) (0.03) (0.05) (0.03) (0.03)
-0.003 -0.006 -0.002 -0.004 -0.004
Import _t
(0.004) (0.004) (0.002) (0.004) (0.004)
0.01 0.03 0.03 0.03 0.03
Supervisory Power
(0.02) (0.02) (0.02) (0.02) (0.02)
0.001 0.001 0.39** 0.001 0.001
Government Ownership
(0.002) (0.002) (0.19) (0.002) (0.002)
0.001 0.001 0.001 0.003 0.003
Foreign Ownership
(0.003) (0.003) (0.003) (0.002) (0.002)
53
0.04 0.04 0.08 0.04 0.04
Shareholder Rights
(0.06) (0.04) (0.05) (0.06) (0.06)
0.02 0.01 0.01 0.04 0.04
Judicial Efficiency
(0.02) (0.02) (0.02) (0.03) (0.03)
-9.82*** -8.85*** -8.93*** -8.95*** -8.91***
Constant
(1.36) (1.21) (1.21) (1.23) (1.23)
Pseudo R^2 0.08 0.09 0.09 0.06 0.06
Observations 1584 1824 1824 1632 1632
54
Table 11: Robustness Test: Probit Tests with More Controls
The table presents the results of four Probit models estimated by maximum likelihood on the sample
of 58 target countries. The dependent variable is Cross-border Probability. We also include another
macro institutional controls: the Governance Indicators. It includes Governance Effectiveness, Rule of Law,
and Control of Corruption. See Table 1 for variable definitions. The coefficient estimates are
transformed to represent the marginal effects evaluated at the means of the independent variables
from the interval regressions. The marginal effects of a dummy variable is calculated as the discrete
change in the expected value of the dependent variable as the dummy variable changes from 0 to 1.
The heteroskedasticity-robust standard errors are presented in brackets. *,**,*** represent statistical
significance at the 10%, 5%, and 1% level respectively.
(1) (2) (3) (4) (5)
Information Sharing _t 2.845*** 2.860** 3.225***
(1.177) (1.346) (1.195)
Information Sharing _a 1.430 2.223 1.836
(2.066) (2.255) (2.077)
Public Registry _t 1.411** 1.067*
(0.534) (0.578)
Public Registry _a 1.523** 1.706***
(0.602) (0.631)
Private Bureau _t 1.691*** 1.387**
(0.653) (0.705)
Private Bureau _a 0.086 0.391
(0.706) (0.776)
Creditor Rights _t 0.333* 0.392**
(0.203) (0.204)
Creditor Rights _a 0.429** 0.455***
(0.204) (0.204)
Enforcement Days _t -0.926*** -0.875***
(0.385) (0.265)
Enforcement Days _t -0.174 -0.723***
(0.363) (0.274)
Control Variables
Same Language 3.344*** 3.375*** 3.381*** 3.380*** 3.316***
(0.494) (0.496) (0.497) (0.493) (0.493)
Same Location 2.131*** 2.160*** 2.173*** 2.074*** 2.011***
(0.639) (0.643) (0.642) (0.643) (0.641)
Same Law 0.827* 0.854* 0.838* 1.010** 0.959**
(0.450) (0.450) (0.452) (0.451) (0.452)
GNI _t 2.030*** 1.975*** 2.038*** 2.080*** 2.111***
(0.228) (0.233) (0.237) (0.229) (0.232)
GNI _a 2.940*** 3.025*** 3.021*** 3.031*** 3.009***
55
(0.249) (0.264) (0.263) (0.252) (0.252)
GDP g _t 0.423* 0.267 0.434 0.148 0.402
(0.258) (0.253) (0.265) (0.241) (0.257)
GDP g _a -0.718** -0.779 -0.670* -0.903*** -0.808***
(0.341) (0.329) (0.348) (0.330) (0.345)
FDI _t 0.082*** 0.083*** 0.082*** 0.077*** 0.076***
(0.018) (0.018) (0.018) (0.018) (0.018)
FDI _a 0.006 0.007 0.005 0.009 0.003
(0.017) (0.018) (0.018) (0.017) (0.017)
Government Ownership _t -0.024* -0.023 -0.023 -0.018 -0.018
(0.015) (0.014) (0.015) (0.014) (0.015)
Government Ownership _a 0.019 0.015 0.019 0.017 0.022*
(0.013) (0.012) (0.013) (0.012) (0.013)
Shareholder Rights _t 0.453** 0.508** 0.442* 0.503** 0.427*
(0.231) (0.233) (0.236) (0.229) (0.231)
Shareholder Rights _a 0.120 0.069 0.034 0.095 0.083
(0.238) (0.245) (0.252) (0.236) (0.239)
Judicial Efficiency _t 0.197 0.182 0.212 0.253* 0.243*
(0.142) (0.166) (0.169) (0.142) (0.143)
Judicial Efficiency _a 0.051 0.135 0.145 0.146 0.146
(0.147) (0.179) (0.180) (0.152) (0.151)
Government Effectiveness _t 1.730*** 1.578*** 1.742*** 1.834*** 2.185***
(0.548) (0.542) (0.552) (0.577) (0.594)
Government Effectiveness _a 1.263 1.513 1.499 0.465 0.364
(0.901) (0.932) (0.931) (0.962) (0.962)
Rule of Law _t 0.014 0.049 0.038 0.150 0.112
(0.651) (0.689) (0.685) (0.655) (0.652)
Rule of Law _a 2.693*** 2.957*** 2.924*** 2.455*** 2.359***
(0.758) (0.804) (0.799) (0.767) (0.765)
Control of Corruption _t 1.016 0.883 1.010 1.046 1.473*
(0.756) (0.774) (0.773) (0.778) (0.782)
Control of Corruption _a 0.802 0.626 0.651 1.445** 1.523**
(0.618) (0.633) (0.637) (0.684) (0.691)
Constant -144.6*** -139.6*** -145.4*** -141.1*** -147.7***
(13.096) (12.732) (13.195) (12.669) (13.115)
Pseudo R^2 0.24 0.24 0.24 0.24 0.24
Observations 1806 1806 1806 1806 1806
56
