We analyze the lending relationships between 1011 banks and 17,284 client borrowers
across 11 emerging economies. We first demonstrate that a state-owned bank's risk appetite
increases as its number of family business group-owned borrowing partners increases.
Second, we show that a non-financial firm-owned bank's risk appetite also increases as its
number of family business group-owned borrowing partners increases. Finally, we show that
a bank is more likely to reduce its risk appetite and improve its operational cost efficiency as …