TY - JOUR
T1 - Corruption in bank lending to firms : cross-country micro evidence on the beneficial role of competition and information sharing
AU - BARTH, James
AU - LIN, Chen
AU - LIN, Ping
AU - SONG, Frank M.
PY - 2009/2/28
Y1 - 2009/2/28
N2 - Building on the important study by Beck, Demirguc-Kunt, and Levine 2006. Bank supervision and corruption in lending. Journal of Monetary Economics 53, 2131-2163], we examine the effects of both borrower and lender competition as well as information sharing via credit bureaus/registries on corruption in bank lending. Using the unique World Bank data set (WBES) covering more than 4,000 firms across 56 countries with information on credit bureaus/registries, assembled by Djankov, McLiesh, and Shleifer 2007. Private credit in 129 countries. Journal of Financial Economics 84, 299-329], and bank regulation data collected by Barth, Caprio, and Levine 2006. Rethinking Bank Regulation: Till Angels Govern. Cambridge University Press, New York] to measure bank competition and information sharing, we find strong evidence that both banking competition and information sharing reduce lending corruption, and that information sharing also helps enhance the positive effect of competition in curtailing lending corruption. We also find that the ownership structure of firms and banks, legal environment, and firm competition all exert significant impacts on lending corruption.
AB - Building on the important study by Beck, Demirguc-Kunt, and Levine 2006. Bank supervision and corruption in lending. Journal of Monetary Economics 53, 2131-2163], we examine the effects of both borrower and lender competition as well as information sharing via credit bureaus/registries on corruption in bank lending. Using the unique World Bank data set (WBES) covering more than 4,000 firms across 56 countries with information on credit bureaus/registries, assembled by Djankov, McLiesh, and Shleifer 2007. Private credit in 129 countries. Journal of Financial Economics 84, 299-329], and bank regulation data collected by Barth, Caprio, and Levine 2006. Rethinking Bank Regulation: Till Angels Govern. Cambridge University Press, New York] to measure bank competition and information sharing, we find strong evidence that both banking competition and information sharing reduce lending corruption, and that information sharing also helps enhance the positive effect of competition in curtailing lending corruption. We also find that the ownership structure of firms and banks, legal environment, and firm competition all exert significant impacts on lending corruption.
KW - Bank lending
KW - Competition
KW - Corruption
KW - Information sharing
UR - http://commons.ln.edu.hk/sw_master/2499
UR - http://www.scopus.com/inward/record.url?scp=61549136700&partnerID=8YFLogxK
U2 - 10.1016/j.jfineco.2008.04.003
DO - 10.1016/j.jfineco.2008.04.003
M3 - Journal Article (refereed)
SN - 0304-405X
VL - 91
SP - 361
EP - 388
JO - Journal of Financial Economics
JF - Journal of Financial Economics
IS - 3
ER -