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Provincial corruption and local development bank performance

Author

Listed:
  • Murharsito
  • Fitri Ella Fauziah
  • Emanuel Kristijadi
  • Rr. Iramani

    (Universitas Islam Nahdlatul Ulama Jepara, Indonesia.
    Universitas Islam Nahdlatul Ulama Jepara, Indonesia.
    Sekolah Tinggi Ilmu Ekonomi Perbanas Surabaya, Indonesia.
    Sekolah Tinggi Ilmu Ekonomi Perbanas Surabaya, Indonesia.)

Abstract

This paper investigates the effect of provincial corruption on the performance of local development bank, specifically to the profitability and credit quality. We use the data of 26 local development banks in 2012 and 2013. For the provincial corruption measurement we use “Public Institution Openness Index”. Results of this study are first, corruption significantly has a negative effect on the profitability of local development bank. Second, corruption doesn’t affect the credit quality of local development bank. These results are expected to enrich the within country corruption effect to the economic studies, particularly to the local development bank which is infrequently investigated.

Suggested Citation

  • Murharsito & Fitri Ella Fauziah & Emanuel Kristijadi & Rr. Iramani, 2017. "Provincial corruption and local development bank performance," Economic Journal of Emerging Markets, Universitas Islam Indonesia, vol. 9(1), pages 66-73, April.
    • Handle: RePEc:uii:journl:v:9:y:2017:i:1:p:66-73
    DOI: 10.20885/ejem.vol9.iss1.art7
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    References listed on IDEAS

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    More about this item

    Keywords

    provincial corruption; local development bank; profitability; credit quality;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior

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