Media Ownership, Concentration and Corruption in Bank Lending

Abstract

Building on the pioneering study by Beck, Demirguc-Kunt and Levine (2006), we examine the effects of media ownership and concentration on corruption in bank lending. Using the unique World Bank dataset covering more than 5,000 firms across 59 countries, we find strong evidence that that state ownership of media is associated with higher levels of bank corruption. We also find that media concentration increases corruption both directly and indirectly through its interaction with media state ownership. In addition, we find that media state ownership and media concentration both accentuate the positive link between official supervisory power and lending corruption and attenuate the negative link between the regulations that empower private monitoring and corruption in lending. Furthermore, the links between media structure and corruption are more pronounced when the borrowing firm is privately owned.

Keywords: bank lending, corruption, media concentration, ownership, bank supervision

JEL Classification: G21, G28, O16