The Regulatory Environment for Business Information Sharing*

Information sharing is a crucial precondition for the development of a thriving credit market and for the access to finance by firms. The focus of this paper is the regulation of the exchange of information on firms as intermediated by credit registries. The paper presents different kinds of indices to test their explanatory power for information distribution for a panel of 90 countries. In a second step, the relationship of information distribution and bank lending is analyzed. It can be stated that an open business reporting environment facilitates information distribution, which positively influences access to credit. The paper concludes with a discussion of policy implications. * ACKNOWLEDGEMENTS: This research has been conducted with the financial support of the World Bank (Private Sector Advisory, Doing Business Project). The author especially thanks Carelee McLiesh, Joanna Kata-Blackman, Nataliya Mylenko and Arnd Plagge for helpful comments. Moreover, the author is grateful to Nadine Brandt and Arnd Plagge for the their excellent research assistance. † The author is lecturer and research fellow at the Freie Universität Berlin, John F. Kennedy-Institut Lansstr. 79 14195 Berlin – Germany, Tel. ++49-30-838 52877, Fax ++49-30-838 52885, e-mail: [email protected]