Abstract
We empirically examine whether bank lending corruption is influenced by the ownership structure of banks, a country's regulatory environment and its level of economic development. We find that corruption in lending is higher when state-owned banks or family-owned banks provide a higher proportion of credit to the economy, in both developed and developing countries. A stronger regulatory environment, either through a stronger supervisory regime or a higher quality of external audits, helps to curtail bank lending corruption if induced by family-controlled ownership, but not if induced by state-controlled ownership. We further find that controlled-ownership of banks by other banks contributes to reduce corruption in lending; the same applies to widely-held ownership of banks, but only for developed countries.
Original language | English |
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Pages (from-to) | 732–751 |
Number of pages | 20 |
Journal | Journal of Comparative Economics |
Volume | 44 |
Issue number | 3 |
Early online date | 29 Aug 2015 |
DOIs | |
Publication status | Published - Aug 2016 |
Keywords
- bank lending
- corruption
- ownership structure
- regulatory environment
- economic development