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How corruption affects bank lending in Russia

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Listed author(s):
  • Weill, Laurent

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.sciencedirect.com/science/article/pii/S0939-3625(10)00059-2
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Article provided by Elsevier in its journal Economic Systems.

Volume (Year): 35 (2011)
Issue (Month): 2 (June)
Pages: 230-243

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Handle: RePEc:eee:ecosys:v:35:y:2011:i:2:p:230-243
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Keywords: Corruption Bank Russia Financial development Economic transition;

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Find related papers by JEL classification:
  • G20 - Financial Economics - - Financial Institutions and Services - - - General
  • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
  • P2 - Economic Systems - - Socialist Systems and Transition Economies

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Cited by:

  1. Fungáčová, 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.
  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. Fungáčová, Zuzana & Kochanova, Anna & Weill, Laurent, 2015. "Does Money Buy Credit? Firm-Level Evidence on Bribery and Bank Debt," World Development, Elsevier, vol. 68(C), pages 308-322.
  4. Zuzana Fungácová & Laura Solanko & Laurent Weill, 2010. "Market power in the russian banking industry," International Economics, CEPII research center, issue 124, pages 127-146.
  5. 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.
  6. Chen, Minghua & Jeon, Bang Nam & Wang, Rui & Wu, Ji, 2015. "Corruption and bank risk-taking: Evidence from emerging economies," Emerging Markets Review, Elsevier, vol. 24(C), pages 122-148.
  7. repec:hal:journl:dumas-00802139 is not listed on IDEAS

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