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CORRUPTION AND BANKS' NON-PERFORMING LOANS: Empirical Evidence from Mena Countries

Author

Listed:
  • Amer Mohamad

    (Department of Banking and Finance, Eastern Mediterranean University, Famagusta, Northern Cyprus via Mersin 10, Turkey)

  • Hatice Jenkins

    (Department of Banking and Finance, Eastern Mediterranean University, Famagusta, Northern Cyprus via Mersin 10, Turkey)

Abstract

Corruption has long been a serious problem in most countries in the Middle East and North Africa (MENA). This research aims to investigate the impact of country-wide corruption on banks’ credit risk across 16 countries in this region over the period 2011–2019. Applying the interactive fixed effects estimation technique on a model consisting of both macro and bank-specific variables and utilizing data from 197 banks, the results show a positive significant association between corruption and banks non-performing loans (NPL). Corruption was found to have a positive relation with credit risk even in banks with high risk aversion.

Suggested Citation

  • Amer Mohamad & Hatice Jenkins, 2025. "CORRUPTION AND BANKS' NON-PERFORMING LOANS: Empirical Evidence from Mena Countries," Development Discussion Papers 2020-25, JDI Executive Programs.
    • Handle: RePEc:qed:dpaper:4625
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    MENA; non-performing; loans; transparency; International; corruption; banks;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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