Advanced Search
MyIDEAS: Login to save this paper or follow this series

How corruption affects bank lending in Russia

Contents:

Author Info

  • 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.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.suomenpankki.fi/bofit_en/tutkimus/tutkimusjulkaisut/dp/Documents/dp1808.pdf
Download Restriction: no

Bibliographic Info

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

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

Contact details of provider:
Postal: Bank of Finland, BOFIT, P.O. Box 160, FI-00101 Helsinki, Finland
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
Email:
Web page: http://www.suomenpankki.fi/bofit_en/
More information through EDIRC

Related research

Keywords: corruption; bank; Russia; financial development; economic transition;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Jun Qian & Philip E. Strahan, 2007. "How Laws and Institutions Shape Financial Contracts: The Case of Bank Loans," Journal of Finance, American Finance Association, vol. 62(6), pages 2803-2834, December.
  2. Beck, T.H.L. & Levine, R. & Loayza, N., 2000. "Financial intermediation and growth: Causality and causes," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3125519, Tilburg University.
  3. Treisman, Daniel, 2000. "The causes of corruption: a cross-national study," Journal of Public Economics, Elsevier, vol. 76(3), pages 399-457, June.
  4. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  5. Simeon Djankov & Caralee McLiesh & Andrei Shleifer, 2005. "Private Credit in 129 Countries," NBER Working Papers 11078, National Bureau of Economic Research, Inc.
  6. Alexei Karas & Koen Schoors & Laurent Weill, 2008. "Are private banks more efficient than public banks ? Evidence from Russia," Working Papers of LaRGE Research Center 2008-15, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
  7. Geeta Batra & Daniel Kaufmann & Andrew H. W. Stone, 2004. "The Firms Speak: What the World Business Environment Survey Tells Us about Constraints on Private Sector Development," Microeconomics 0405004, EconWPA.
  8. Rainer Haselmann & Katharina Pistor & Vikrant Vig, 2010. "How Law Affects Lending," Review of Financial Studies, Society for Financial Studies, vol. 23(2), pages 549-580, February.
  9. Lizal, Lubomir & Kocenda, Evzen, 2001. "State of corruption in transition: case of the Czech Republic," Emerging Markets Review, Elsevier, vol. 2(2), pages 138-160, June.
  10. Vernikov , Andrei V., 2007. "Russia's banking sector transition: Where to?," BOFIT Discussion Papers 5/2007, Bank of Finland, Institute for Economies in Transition.
  11. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-58, June.
  12. Rafael La Porta & Florencio Lopez-de-Silane & Andrei Shleifer & Robert W. Vishny, 1997. "Legal Determinants of External Finance," NBER Working Papers 5879, National Bureau of Economic Research, Inc.
  13. Jakob Svensson, 2005. "Eight Questions about Corruption," Journal of Economic Perspectives, American Economic Association, vol. 19(3), pages 19-42, Summer.
  14. Sharpe, Steven A, 1990. " Asymmetric Information, Bank Lending, and Implicit Contracts: A Stylized Model of Customer Relationships," Journal of Finance, American Finance Association, vol. 45(4), pages 1069-87, September.
  15. Levine, Ross, 1999. "Law, Finance, and Economic Growth," Journal of Financial Intermediation, Elsevier, vol. 8(1-2), pages 8-35, January.
  16. Enrica Detragiache & Thierry Tressel & Poonam Gupta, 2008. "Foreign Banks in Poor Countries: Theory and Evidence," Journal of Finance, American Finance Association, vol. 63(5), pages 2123-2160, October.
  17. Maudos, Joaquin & Fernandez de Guevara, Juan, 2003. "Factors Explaining the Interest Margin in the Banking Sectors of the European Union," MPRA Paper 15252, University Library of Munich, Germany.
  18. Levin, Mark & Satarov, Georgy, 2000. "Corruption and institutions in Russia," European Journal of Political Economy, Elsevier, vol. 16(1), pages 113-132, March.
  19. Stiglitz, Joseph E & Weiss, Andrew, 1981. "Credit Rationing in Markets with Imperfect Information," American Economic Review, American Economic Association, vol. 71(3), pages 393-410, June.
  20. Goel, Rajeev K. & Nelson, Michael A., 2010. "Causes of corruption: History, geography and government," Journal of Policy Modeling, Elsevier, vol. 32(4), pages 433-447, July.
  21. Levine, Ross, 1998. "The Legal Environment, Banks, and Long-Run Economic Growth," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 30(3), pages 596-613, August.
  22. Pierre-Guillaume Méon & Khalid Sekkat, 2005. "Does corruption grease or sand the wheels of growth?," Public Choice, Springer, vol. 122(1), pages 69-97, January.
  23. Asim Ijaz Khwaja & Atif Mian, 2005. "Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market," The Quarterly Journal of Economics, MIT Press, vol. 120(4), pages 1371-1411, November.
  24. Safavian, Mehnaz S. & Graham, Douglas H. & Gonzalez-Vega, Claudio, 2001. "Corruption and Microenterprises in Russia," World Development, Elsevier, vol. 29(7), pages 1215-1224, July.
  25. Pranab Bardhan, 1997. "Corruption and Development: A Review of Issues," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1320-1346, September.
  26. Goel, Rajeev K., 2008. "Regulatory bottlenecks, transaction costs and corruption: A cross-country investigation," BOFIT Discussion Papers 10/2008, Bank of Finland, Institute for Economies in Transition.
  27. Johann Graf Lambsdorff, 2003. "How Corruption Affects Productivity," Kyklos, Wiley Blackwell, vol. 56(4), pages 457-474, November.
  28. Mokhtari, Manouchehr & Grafova, Irina, 2007. "Corruption: Theory and evidence from the Russian Federation," Economic Systems, Elsevier, vol. 31(4), pages 412-422, December.
  29. Paul Wachtel & Rainer Haselmann, 2006. "Institutions and Bank Behavior," Working Papers 06-16, New York University, Leonard N. Stern School of Business, Department of Economics.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Oleksandr Talavera & Andriy Tsapin & Oleksandr Zholud, 2006. "Macroeconomic Uncertainty and Bank Lending: The Case of Ukraine," Discussion Papers of DIW Berlin 637, DIW Berlin, German Institute for Economic Research.
  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. Zuzana Fungacova & Christophe J. Godlewski & Laurent Weill, 2009. "Asymmetric Information and Loan Spreads in Russia: Evidence from Syndicated Loans," Working Papers of LaRGE Research Center 2009-01, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:hhs:bofitp:2008_018. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Päivi Määttä).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.