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Collectivism and connected lending

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  • Dheera-aumpon, Siwapong

Abstract

National culture may affect the prevalence of connected lending. This study aims to assess the effects of national culture, especially collectivism, on the need for special connections with banks, which is a measure of connected lending. Using data covering more than 4000 firms in 40 countries, this study finds that institutional collectivism decreases the need for special connections, while in-group collectivism does not. This indicates that institutional collectivism is linked to lending cronyism while in-group collectivism is not. The results also suggest that the need for special connections with banks is not identical to the corruption of bank officials. They are separate notions and should not be treated as a proxy for each other.

Suggested Citation

  • Dheera-aumpon, Siwapong, 2019. "Collectivism and connected lending," Research in International Business and Finance, Elsevier, vol. 48(C), pages 258-270.
    • Handle: RePEc:eee:riibaf:v:48:y:2019:i:c:p:258-270
    DOI: 10.1016/j.ribaf.2019.01.005
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    Cited by:

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    2. Kowalewski, Oskar, 2023. "Effect of operating multiple affiliates on the performance of subsidiaries in the same host country," Research in International Business and Finance, Elsevier, vol. 65(C).
    3. Bahoo, Salman, 2020. "Corruption in banks: A bibliometric review and agenda," Finance Research Letters, Elsevier, vol. 35(C).
    4. Hasan, Iftekhar & Jackowicz, Krzysztof & Kowalewski, Oskar & Kozłowski, Łukasz, 2023. "Cultural values of parent bank board members and lending by foreign subsidiaries: The moderating role of personal traits," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 83(C).
    5. Jackowicz, Krzysztof & Kowalewski, Oskar & Kozłowski, Łukasz, 2022. "Foreign bank lending: The role of home country culture during prosperous and crisis periods," Journal of Multinational Financial Management, Elsevier, vol. 66(C).

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    More about this item

    Keywords

    Collectivism; Financial institution; Firm financing; Institutional environment; National culture;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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