Political connections, bailout in financial markets and firm value
(2016)
Journal Article
Banerji, S., Duygun, M., & Shaban, M. (2018). Political connections, bailout in financial markets and firm value. Journal of Corporate Finance, 50, 388-401. https://doi.org/10.1016/j.jcorpfin.2016.12.001
The paper shows that politically motivated interventions in the financial market in the form of bailing out borrowing firms reduce banks’ incentives to gather valuable information about firms’ projects. This loss of information is a hidden cost which... Read More about Political connections, bailout in financial markets and firm value.