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How corruption affects bank lending in Russia

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  • Weill, Laurent

    ()
    (BOFIT)

Abstract

The aim of this study is to investigate the impact of corruption on bank lending in Russia. This issue is of major interest in order to understand the causes of financial underdevelopment and the effects of corruption in Russia. We use regional measures of corruption and bank-level data to perform this investigation. Our main estimations show that corruption hampers bank lending in Russia. We investigate whether this negative role of corruption is influenced by the degree of bank risk aversion, but find no effect. The detrimental effect of corruption is only observed for loans to households and firms, in opposition to loans to government. Additional controls confirm the detrimental impact of corruption on bank lending. Therefore, our results provide motivations to fight corruption to favor bank lending in Russia.

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File URL: http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/dp1808.pdf
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Bibliographic Info

Paper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 18/2008.

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Length: 33 pages
Date of creation: 21 Nov 2008
Date of revision:
Handle: RePEc:hhs:bofitp:2008_018

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Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
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Web page: http://www.suomenpankki.fi/bofit_en/
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Keywords: corruption; bank; Russia; financial development; economic transition;

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Citations

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Cited by:
  1. Talavera, Oleksandr & Tsapin, Andriy & Zholud, Oleksandr, 2012. "Macroeconomic uncertainty and bank lending: The case of Ukraine," Economic Systems, Elsevier, vol. 36(2), pages 279-293.
  2. Fang, Yiwei & Hasan, Iftekhar & Marton, Katherin & Waisman, Maya, 2014. "Bank valuation in new EU member countries," Economic Systems, Elsevier, vol. 38(1), pages 55-72.
  3. Fungácová , Zuzana & Kochanova, Anna & Weill, Laurent, 2014. "Does money buy credit? Firm-level evidence on bribery and bank debt," BOFIT Discussion Papers 4/2014, Bank of Finland, Institute for Economies in Transition.
  4. Fungacova, Zuzana & Godlewski, Christophe J. & Weill, Laurent, 2009. "Asymmetric Information and Loan Spreads in Russia: Evidence from Syndicated Loans," BOFIT Discussion Papers 7/2009, Bank of Finland, Institute for Economies in Transition.

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