Corporate Governance and Access to Finance - ESBG

nnDCI (Depth of credit information index) – PRC (Public registrycoverage) and PBC (Private bureau coverage), obtained from Doingbusiness, 2009, World Bank, measure the scope, accessibility andquality of the credit information available through either public orprivate credit registries. PRC reports the number of individuals andfirms listed in a public credit registry and the indicator PBC doesthe same in a private credit bureau. The three indicators are normalizedto range between 0 and 1.FD (Financial Development), obtained from the Financial DevelopmentReport, 2009, World Economic Forum, ranks 55 countries accordingto the level of their financial development, analysing the drivers offinancial system development that support economic growth.The CGI ranges between 0 and 1. The higher the indicator, the greaterthe quality of the Corporate Governance at the country level.Chart 4 shows the positive and significant correlation between CorporateGovernance and Access to Finance at the country level (our CorporateGovernance Country Index and the Honohan index). In this sense,countries with better standards of Corporate Governance tend to havehigher levels of Access to Finance. In statistical terms, and in the absenceof a more sophisticated econometric analysis, almost one quarter of thevariation in the level of Access to Finance at the country level would beexplained by the Corporate Governance system in that country.In Chart 5, for those countries for which we have information, we plotthe size of the dots according to the market share of WSBI members.The results show that in those countries with higher levels of bothCorporate Governance and Access to Finance, WSBI members’ marketshare is bigger. This suggests that in countries with a better CorporateGovernance environment and a relatively higher presence of institutionswith an Access to Finance mission (like WSBI members) financial outreachtends to be higher.78