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How corruption affects bank lending in Russia
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.
... Du fait de son ampleur, la corruption est susceptible d ' influencer l ' activité bancaire et le crédit. Certains auteurs se sont intéressés à la relation entre corruption et crédit bancaire et ont établi un effet négatif de la corruption sur le crédit bancaire, notamment les prêts destinés aux entreprises et aux ménages (Detragiache, Tressel, & Gupta, 2008 ;Weill, 2011a). Toutefois, cet effet négatif de la corruption sur l ' activité bancaire n ' est pas un axiome mathématique accepté par tous. ...
... L ' hypothèse de l ' effet négatif de la corruption sur l ' activité bancaire passe par trois canaux essentiels : le coût du crédit, les asymétries d ' information et l ' application de la loi. En effet, la corruption peut être considérée comme un obstacle au financement bancaire de l ' activité économique, car elle agit comme une taxe qui augmente le coût du prêt pour l ' emprunteur (Weill, 2011a ;Ali, Fhimab, & Nouira, 2020). En outre, les entreprises opérant dans un environnement où la corruption est endémique sont moins transparentes et plus enclines à adopter des comportements non conformes à l ' éthique (Bermpei, Kalyvas, & Leonida, 2020). ...
... En utilisant des données micro et macro, il montre que la corruption réduit le crédit bancaire aussi bien dans un échantillon mixte que dans des échantillons de pays développés et en développement pris séparément. La conclusion suivant laquelle la corruption réduit le crédit bancaire est établie par l ' auteur dans les cas russe en utilisant des données microéconomiques (Weill, 2011a). En prenant appui sur un échantillon de 2848 entreprises en Chine, Liu, Li et Guo (2020) montre qu ' un faible niveau de corruption augmente l ' accès des entreprises aux prêts bancaires, alors qu ' un niveau élevé de corruption empêche les entreprises d ' obtenir des prêts bancaires. ...
This paper analyses the effect of corruption on bank lending activity on a sample of 302 private banks from 25 countries in sub-Saharan Africa over the period 1995 to 2018. Using the generalized moments method, we find a negative effect of corruption on bank credit on the one hand, and a positive effect of corruption on non-performing loans on the other hand. This negative effect is empirically verified even if the heterogeneity linked to membership of a regional economic community in which integration is deep (ECOWAS) and membership of the CFA Franc zone is taken into account. These results suggest that anti-corruption policies are crucial in reducing the negative spillover effects generated by a poor institutional environment on access to bank lending and the quality of bank credit.
... Corruption is defined as "the use of public or corporate position for private benefit" (Bhargava, 2005). Corruption can directly or indirectly affect the financial system (Swaleheen, 2008;Houston, Lin and Ma, 2011;Weill, 2011;Park, 2012;Borg Barthet, 2020). Numerous economists believe that corruption has a detrimental effect on the financial industry and the economy (Mauro, 1995;Jahanshahi et al., 2011;Clark and Kundu, 2021). ...
... Various studies have investigated the relationship between corruption and bank lending (Houston, Lin and Ma, 2011;Weill, 2011;Toader et al., 2018;Djalilov and Piesse, 2019;Agarwal et al., 2020;Bahoo, 2020;Kuhfeld et al., 2020;Son et al., 2020). In this context, Boudriga et al. (2010) analyzed NPLs drivers in 12 Middle East and North Africa (MENA) countries. ...
... PLS is participative (either directly or through a partnership) or non-participative (no equity interest). Many proponents of international banking facility (IBF) argue that equity participation is preferable to non-participatory finance, which they refer to as "trade-based financing modes" (Zaher and Kabir Hassan, 2001;Sundarajan and Errico, 2002;Usmani, 2002). Some of the most common forms are Murabaha, Ijara and Istisna, bai Mujjal and qard al hasana. ...
Purpose
This study aims to examine the impact of anti-money laundering (AML) regulations on financial inclusion using a comprehensive measure of AML regulations developed by the Basel Institute on Governance. Again, this study investigates the existence of threshold effects in the AML regulations–financial inclusion nexus.
Design/methodology/approach
This study uses panel data across 212 economies (developed, developing and Africa) of the globe-spanning from 2012 to 2019. This study uses the dynamic panel threshold estimation technique proposed by Seo et al. (2019).
Findings
In general, the results indicate that AML regulations promote financial inclusion across the globe. However, AML regulations spur financial inclusion below the threshold of AML regulations, whereas, above the thresholds, AML regulations have damaging effects on financial inclusion. Further, the author finds that AML regulations have a detrimental impact on financial inclusion for developed economies. In contrast, AML regulations promote financial inclusion at all levels of AML regulations for African countries.
Practical implications
The findings of this study imply that countries must make conscious efforts in combating the incidence of money laundering by establishing sound AML regulatory regimes as a means of promoting financial inclusiveness. However, there is a need for regulators to ensure cost-effective and efficient implementation of AML regulations.
Originality/value
The value of this paper is its contribution to literature as it is a major attempt in empirically assessing the impact of AML regulations on financial inclusion. Again, to the best of the author’s knowledge, this is the first study to examine the non-linear relationship between AML regulations and financial inclusion.
... Corruption is defined as "the use of public or corporate position for private benefit" (Bhargava, 2005). Corruption can directly or indirectly affect the financial system (Swaleheen, 2008;Houston, Lin and Ma, 2011;Weill, 2011;Park, 2012;Borg Barthet, 2020). Numerous economists believe that corruption has a detrimental effect on the financial industry and the economy (Mauro, 1995;Jahanshahi et al., 2011;Clark and Kundu, 2021). ...
... Various studies have investigated the relationship between corruption and bank lending (Houston, Lin and Ma, 2011;Weill, 2011;Toader et al., 2018;Djalilov and Piesse, 2019;Agarwal et al., 2020;Bahoo, 2020;Kuhfeld et al., 2020;Son et al., 2020). In this context, Boudriga et al. (2010) analyzed NPLs drivers in 12 Middle East and North Africa (MENA) countries. ...
... PLS is participative (either directly or through a partnership) or non-participative (no equity interest). Many proponents of international banking facility (IBF) argue that equity participation is preferable to non-participatory finance, which they refer to as "trade-based financing modes" (Zaher and Kabir Hassan, 2001;Sundarajan and Errico, 2002;Usmani, 2002). Some of the most common forms are Murabaha, Ijara and Istisna, bai Mujjal and qard al hasana. ...
Purpose
This research aims to examine the impact of money laundering (ML) and corruption on the asset quality of conventional and Islamic banks.
Design/methodology/approach
The current study used the data of conventional and Islamic banks of Pakistan from 2012 to 2018. In this study, we used fully modified ordinary least squares, dynamic ordinary least squares and pooled ordinary least square methods to analyze the data.
Findings
The results found that corruption and ML positively affect the conventional banking non-performing loans (NPLs). In contrast, corruption and ML harm the Islamic bank’s loan portfolio quality.
Originality/value
To the best of the authors’ knowledge, the relationship between corruption, ML and NPLs in conventional and Islamic banks of Pakistan are examined for the first time.
Practical Implications
According to the study’s findings, bank authorities should establish an effective method for monitoring loan activities and developing new and innovative products in Islamic banks. Additionally, the Pakistani government needs to improve anti-corruption and anti-ML policies to earn investors’ trust.
... The existing literature on the institutional quality and NPLs nexus is limited. Only a few studies have investigated the affect of corruption either on bank performance (Bougatef, 2017;Ozili, 2018;Weill, 2011aWeill, , 2011b or loan quality (Ahmad, 2013;Bougatef, 2016;Goel & Hasan, 2011). All of these studies have been focussed on the linear relationship; however, nothing has been said about the possible non-linear association. ...
... Countries that ensure good governance and implement clear strategies to fight corruption record weak levels of NPLs. In relation to bank activities, several studies have investigated the negative effect of corruption regarding bank lending (Barth et al., 2009;Bougatef, 2015Bougatef, , 2016Weill, 2011aWeill, , 2011b. Weill (2011a) investigated the effect of corruption on bank lending in Russia. ...
... He used a sample of 22 countries over the period 2008-2012. The empirical results confirm the findings of Weill (2011aWeill ( , 2011b. He found that corruption hampers banking activities and aggravates the problem with bad loans, especially in highly corrupted countries. ...
The purpose of this article is to check whether there is a threshold effect in the government stability, corruption and non‐performing loans (NPLs) relationship in the MENA region. To this end, we used a sample of MENA banks over the period 2004–2017. Empirical results of the panel smooth transition regression model indicate that there is a threshold effect in the government stability, corruption and NPLs relationship. More specifically, we have found that the impact of corruption and government stability on NPLs is negative and significant only if a certain threshold level has been attained; until then, the effect is insignificant.
... Linkage of corruption and banking performance According to the literature, corruption is a critical factor of banking profitability and stability (Toader et al., 2018;Bolarinwa and Soetan, 2019;Mohammad et al., 2019). It has been shown that corruption can have an impact on banking performance both indirectly through lending (Houston et al., 2011;Weill, 2011) and directly through savings (Swaleheen, 2008), exacerbating the issue of non-performing loans (Park, 2012). In a similar vein, Weill (2011) discovered that corruption has a negative impact on bank lending, and that this effect is applicable to loans to both individuals and governments. ...
... As part of Shariah compliance, Islamic banks must be ethical and avoid prohibited elements, i.e. riba, najsh, maysir, gharar, ihtikar, gabun and so on (Ariff, 1988;Arshad and Rizvi, 2013). Corruption may have an indirect impact on banking performance through lending (Houston et al., 2011;Weill, 2011) as well as a direct impact on savings (Swaleheen, 2008). As per the intrinsic values of Islamic banking, it has a sacred responsibility to avoid unethical practices, causing social injustice. ...
Purpose
This paper aims to examine the impact of corruption and money laundering (ML) on the profitability and stability of Islamic banks.
Design/methodology/approach
This study used the data of 53 conventional and 19 Islamic banks of Pakistan and Malaysia to have comparative insights. The empirical methods include the fixed effect and random effect regression and generalized methods of moment for robust results.
Findings
The results indicate that Islamic banks gain from corruption and ML. Corruption and ML affect bank profitability and stability positively in a less corrupt environment, i.e. Malaysia; however, corruption hurts Islamic banks’ performance, and ML favours Islamic banking profitability and stability in a more corrupt environment, i.e. Pakistan.
Originality/value
The present study pioneers the debate on corruption and ML related to Islamic banking profitability and stability. This study provides important insights to regulators and Shariah advisors to build a real model of Islamic banking.
... Charumilind et al. (2006) find that firms with connection to politicians have better access to long-term bank loans and need less collateral. Detragiache et al. (2008) and Weill (2011aWeill ( , 2011b find that the growth of lending decreases with more severe corruption. Park (2012) finds that non-performing loans increase in countries plagued by higher corruption. ...
... First, it extends the broad literature on risk taking and bank stability in Islamic banking, by investigating how the soundness of Islamic banks is differently affected by corruption compared to their conventional counterparts. By analyzing both Islamic and conventional banks, we complement the works of Cih ak and Hesse (2010), Hasan and Dridi (2011), Weill (2011a, 2011b, Abedifar et al. (2013), Beck et al. (2013, Mollah and Zaman (2015) and Abedifar et al. (2017), among others. Second, we also contribute to the literature on corruption more generally by highlighting the role played by corporate governance, specifically Shari'ah based, in possibly mitigating the negative effects of corruption on bank soundness. ...
Purpose
This study aims to examine whether the soundness of Islamic banks is differently affected by corruption compared to conventional counterparts. Moreover, the Shari’ah supervisory board (SSB), as a cornerstone of Islamic banking and representing a multi-layer corporate governance model, is expected to moderate the influence of corruption on soundness for Islamic banks.
Design/methodology/approach
This study considers a unique sample of 1,528 observations on 71 Islamic banks and 120 conventional banks operating in 11 emerging and developing Muslim countries over the 2010–2017 period. This study uses generalized least squares regression model and the coefficients are estimated by using random-effects estimator. In addition, to overcome a potential endogeneity concern for corruption and bank stability relationship, this study uses Two-Stage Least Squares regression instrumental variable estimator.
Findings
The authors find consistent evidence that higher levels of corruption adversely impact the soundness for conventional banks, in favor of the sand the wheel hypothesis in the corruption–development nexus. However, as expected, this study finds a less negative impact of corruption on soundness of Islamic banks. Moreover, SSB moderates the relationship between corruption and soundness of Islamic banks. The findings are robust to a battery of alternative checks.
Research limitations/implications
Findings of the paper regarding the detrimental impact of corruption on bank soundness justify the urgency of the anti-corruption campaigns in these countries, particularly for conventional banks. Moreover, the findings provide support for the positive contribution of SSBs to overcome the adverse effect of corruption on soundness of Islamic banks and thereby underscoring the need for enforcement and regulatory mechanism for SSBs to be more effective.
Originality/value
To the best of the authors’ knowledge, this is the first study to examine the moderating impact of Shari’ah supervision on the relationship between corruption and soundness of Islamic banks.
... Charumilind et al. (2006) espoused the view that organizations wielding some political influence may access unsecured loans with which expose the lending agency to considerable risks. Weill (2011) stressed that corruption exposes banks to high risks of non-payment of loans and stifles credit growth. Per the researchers' knowledge, there is no empirical study in the context of Ghana which has examined the impact of capital adequacy requirement and corruption on banks' risk-taking behavior. ...
... However, studies undertaken by Agoraki et al. (2011), Klomp & Haan (2012), Haq & Heaney (2012), Bouheni et al. (2014), Lee et al. (2015), and Ashraf et al. (2016) found a negative connection between bank capital and risk-taking. Detragiache et al. (2008) and Weill (2011) disclosed that, loan growth is severely hampered by corruption. Park (2012) posited that countries afflicted by severe levels of corruption have record numbers of nonperforming. ...
This paper examines the impact of capital adequacy and corruption on bank risk-taking behaviour in Ghana over the period 2008-2017. Using the system generalized method of moments (GMM) technique; we establish that increasing bank capital has a significant positive effect on banks’ risk-taking. This finding supports the “regulatory hypothesis”. In addition, the results show that corruption induces bank risk-taking, thus favoring the “sand the wheels” view in the corruption-development nexus. Based on the findings, we discuss relevant policy implications for regulators and bank managers.
... Third, there are two groups of studies that examine the relationship between finance and corruption. The first set empirically proves that corruption sands the wheel of financial development (Weill, 2011;Park, 2012;Yaroson, 2013;Cooray and Schneider, 2018). This means that corruption is negatively associated with higher levels of financial sector development. ...
... Theoretically, studies argue that corruption and finance are interrelated (Cooray and Schneider, 2018). The extant literature provides that finance may correlate with the level of corruption which alters efficient allocation of financial resources to the real sector due to the asymmetric information problems, thereby conforming to the sand wheel hypothesis of corruption-finance nexus (Barth et al., 2004;Weill, 2011;Park, 2012). There is theoretical thinking arguing that finance may alter the level of corruption due to its chances in exerting governance system (Tavares, 2003;Levine, 2005;Altunbas and Thorton, 2012). ...
This study investigates the effect of shadow economy on environmental pollution, and the role of institutional quality in moderating the impact in African countries between 1991 and 2015. The study employs three pollutant variables namely: carbon dioxide emissions per capita, methane emission and nitrous oxide emission as robustness check. Also, battery of methodologies; Ordinary Least Squares, fixed effects, and system Generalized Method of Moments are used to drive out the conclusions of this study. The findings reveal that shadow economy and institutional quality contribute significantly to environmental pollution in Africa. Further, the interactive effect of shadow economy and institutional quality worsen environmental quality in the region. This reveals that weak institutional quality recorded in the region increases the level of shadow economy, thereby intensify environmental pollution. The study concludes that weak institutional framework in the region reinforces shadow economy and environmental pollution. Hence, findings from this study can help policy makers in the region to better understand the role of institutional quality in reducing shadow economy and environmental pollution.
This study enriches our understanding on the role of institutional quality in the relationship between environmental quality and shadow economy in African context. It investigates the direct and indirect impact of institutions and shadow economy on environmental quality. The study also uses three different robust variables to measure environmental pollution (carbon dioxide (CO2) emissions per capita, methane emission and nitrous oxide emission) for sensitivity analysis.
... Chortareas et al. (2013) demonstrate that this index "captures the failure of integrity in the system, a distortion by which individuals are able to gain at the expense of the whole." In the literature, corruption is widely believed to hamper bank lending since it acts as a tax that heightens the cost of lending (Weill, 2011). Therefore, CORFR is expected to affect the perceived credit risk costs negatively. ...
... That is, severe corruption increases the perceived costs by discouraging banks to engage in lending. This result is in line with Weill (2011) in that corruption may hamper lending expansion by raising the cost of loans. ...
The reduction of non-performing loans, and making correct provisions for them, plays a primary role in the management and minimization of banking credit risk. However, these actions depend primarily upon the cost at which banks may dispose of these bad loans. Hence, this study aims to perceive the price of banks’ credit risk via estimating the shadow price of non-performing loans. We assess and compare the perceived price of the credit risk of Islamic and conventional banks operating in 9 countries from the Middle East and Asia, using a quadratic directional distance function. Following this, we evaluate the impact of different settings of directional vectors on shadow prices by conducting a risk-sensitivity analysis. Applying bootstrap regression, the factors affecting NPLs’ prices are further investigated. The paper concludes that the estimation of the shadow prices of bad loans can provide important elements in favor of credit risk management and, therefore, credit risk mitigation.
... (Ahmad, 2013). corruption adds to uncertainty for banks; it reduces their trust in courts and acts as a tax on loans for borrowers (Weill, 2011). ...
... A number of papers have examined the dimensions of corruption perception on stock market development (Ayaydın and Baltacı, 2013;Ming et al., 2018) and on banking sector (Weill, 2011;Ahmad, 2013;Arshad and Rizvi, 2013;Anaere, 2014;chen et al, 2015;son et al., 2017;Toader et al., 2018;Nurhidayat and Rokhim, 2018;Ali et al., 2019;Bolarinwa and soetan, 2019;ozili, 2019). some of these are given below: Ng (2006) aim is to summarize how corruption may affect the bond and stock markets. ...
Studying the relation between corruption and financial markets and examining its consequences for the financial system have attracted many researchers in recent years. To understand the effect of it's to financial markets is important for especially emerging countries. This paper examined the impact of Corruption Perception Index (CPI), government size, openness, and GDP on the financial development using the Generalized Method of Moment (GMM) approach of 19 Eastern Europe and Central Asia countries for the period 2012 to 2017 as yearly dates. Our findings suggest that there is not a relationship between the level of corruption and financial development.
... Estimation outcomes also report the existence of a positive relationship between the net interest margin and banking crises. This result shows that higher interest rates charged by banks to customers would probably attract the most risky borrowers -the adverse selection problem (Stiglitz and Weiss, 1981) -and induce an excessive risk taking by banks, that might consequently impact their vulnerability (García-Herrero et al., 2009;Weill, 2011b;Ahmad, 2013). ...
... This supports the idea that, for the countries in the left-hand side column of Table 6, any increase in the control of corruption coefficient avoids a banking crisis. Numerous studies in the literature support such an argument for different countries, such as Claessens et al. (2008) for Brazil, Wedeman (2012) for China, Quah (2008) for India, Morris and Klesner (2010) for Mexico, Weill (2011b) for Russia, Corke et al. (2014) for Turkey. ...
... Thus, it is reasonable to believe that poor-performing state-owned enterprises, particularly in developing countries, have abundant loans that are possibly motivated by either favours or political reasons. For instance, bribery is a determinant of firms' financial access in China (Chen, Liu, & Su, 2013) and bank lending in Russia (Weill, 2011). In summary, our findings align with the institutional economic theory that argues for the beneficial role of the institution in strengthening financial stability and improving economic performance. ...
This study investigates the extent to which capital inflows and their composition affect domestic credit growth in emerging market and developing economies (EMDEs) and the role of institutional quality in mediating the capital inflows and domestic credit growth nexus. Using a sample of 130 EMDEs from 1991-2015, the study uses generalized method of moments to control for endogeneity issues. The study makes notable contributions to the literature and policy discourse. First, this is the first empirical studies that documents the persistence of domestic credit growth in EMDEs. Second, the study provides a granular analysis of the capital inflows – domestic credit growth nexus. Whereas gross capital inflows significantly exert a positive impact on domestic credit growth, disaggregated-level analyses showed that only foreign direct investment positively affects domestic credit growth whereas portfolio equity has a negative effect; and portfolio debt and other investment do not. Third, the study adds novel evidence that institutional quality plays a crucial role in mediating the capital inflows – domestic credit growth nexus. Fourth, this study crystallises the lens used to investigate the interactions between capital inflows and institutional quality in analysing the capital inflows – domestic credit growth nexus. Finally, the findings are helpful for designing and implementing macro-financial policy and strengthening institutions, especially in managing capital flows and financial sector.
... Park (2012) finds that non-performing loans increase in countries plagued by higher corruption. Likewise, Detragiache et al. (2008) and Weill (2011) find that the growth of lending decreases with severe corruption. Moreover, Chen et al. (2013) find that bribery enables more productive firms to be granted larger loans, consistent with the "grease the wheels" hypothesis of corruption. ...
This paper investigates whether the risk-taking of Islamic banks is differently affected by corruption compared to conventional banks. We consider a matched sample of 70 Islamic and conventional banks operating in 10 OIC (Organization of Islamic Cooperation) countries over the 2012-2017 period. We find consistent evidence that higher levels of corruption are associated with higher bank risk for both conventional and Islamic banks. However, this association is attenuated by the size of the Shari’ah supervisory board (SSB), the presence of female board members, and higher academic qualifications of SSB members. For conventional banks, the moderating effect of the presence of female directors and academically qualified members on the board of directors is also prevalent but to a lesser extent.
... In recent years, the value of institutional factors in the development of financial systems has become evident (Hasan, Wachtel, & Zhou, 2009;Kutan, Samargandi, & Sohag, 2017;Law & Habibullah, 2006;Law & Azman-Saini, 2012;Minea & Villieu, 2010;Wang, Cheng, Wang, & Li, 2014;Weill, 2011). Consequently, these factors can help to implement policies targeting institutional reforms which are needed to promote growth-enhancing financial and corruption. ...
Purpose
The purpose of this study is to examine the nonlinear relationship between managerial ability and bank liquidity creation and to investigate the role of institutional quality in shaping the managerial ability–liquidity creation nexus.
Design/methodology/approach
This study is based on a sample of 126 MENA region banks for the period extending from 2006 to 2020. We apply a dynamic panel threshold method to examine the nonlinearity.
Findings
The results reveal that the relationship between managerial ability and liquidity creation is nonlinear and depends on the level of managerial ability. Moreover, using different indicators of institutional quality, the results reveal that the impact of the managerial ability on liquidity creation depends on the institutional quality. More specifically, we find that the impact of managerial ability depends on the level and type of the institution quality indicator.
Research limitations/implications
The nonlinearity between managerial ability and bank liquidity creation shows that the level of managerial ability as well as institutional quality can be a major determinant of the bank liquidity creation.
Originality/value
This paper gives a more complete and detailed image on the relationship between institutional quality, managerial ability and bank liquidity creation using a nonlinear methodology, which extends to the current literature’s insight.
Purpose
The purpose of this study is to examine the nonlinear relationship between institutional quality and bank liquidity creation and to analyze whether the impact of institutional quality on liquidity creation depends on the level of institutional quality or not.
Design/methodology/approach
This study is based on a sample of 126 Middle East/North Africa (MENA) region banks for the period extending from 2006 to 2020. To deal with the nonlinearity, we apply a dynamic panel threshold method.
Findings
Using six different indicators of institutional quality, the results reveal that the impact of the institutional quality on liquidity creation depends on the level and the indicator of institutional quality. While control of corruption, government effectiveness and regulatory quality have positive (negative) effects below (above) the threshold value, political stability has a positive impact below and above the threshold value. Regarding the role of law and voice and accounting, only significant negative impact above the threshold value is found.
Research limitations/implications
The research findings have important implications for policymaking. It suggests that institutional quality may have the potential to reduce liquidity creation rather than increase it. As a result, policymakers should work on providing an optimal level of institutional quality that promotes bank liquidity creation as a means to stimulate economic growth.
Originality/value
This paper is among the first studies, to the best of the authors’ knowledge, to examine the nonlinear relationship between institutional quality and bank liquidity creation using a dynamic panel threshold model.
The continued rise in SMEs’ corruption-related activities results in uncertainty around their ability to sustainably contribute to economic growth, leaving SMEs financially fragile and exposed to problems associated with trade credit management resulting in business exits. Given that little research has been conducted on how corruption affects smaller businesses while corruption’s impact on SMEs’ trade credit management effectiveness remains largely unexamined, the study aims to determine the impact of corruption on SMEs’ trade credit management effectiveness. By addressing this unanswered research gap, SMEs could be better equipped to understand how corruption affects their trade credit management in support of their overall finances. The study employed a quantitative research design with purposive sampling using a survey by administrating 10450 online questionnaires tested by a sample of 450 SMEs across South Africa. The result aligns with expectations around corruption being detrimental to SMEs’ trade credit management effectiveness while also indicating, unexpectedly, SMEs’ willingness to partake in corruption, given that SMEs benefit from increased effectiveness in managing trade credit. The study adds to the existing literature on corruption and SMEs’ trade credit management while also providing anti-corruption recommendations to SMEs that are dependent on trade credit. In so doing, SMEs could be better equipped to understand how corruption affects their trade credit management to support their overall finances contributing to improved SME creation rates and fostering entrepreneurship as a pivotal mechanism for improving South Africa’s sustainable development goals.
This study investigates the impact of financial inclusion on environmental sustainability in 178 emerging and developing countries from 1996 to 2022. Employing a composite index derived through Principal Component Analysis (PCA) as a measure of financial inclusion and covering four aspects (access, depth, efficiency, stability), our analysis reveals negative outcomes. The findings indicate that enhancing financial inclusion is associated with a notable increase in CO2 per capita emissions as well as in Total Greenhouse Gas emissions. We demonstrate that controlling corruption improves environmental quality, yet this measure alone is insufficient to fully mitigate the impact of financial inclusion, as indicated by our moderation analysis. The same analysis, however, shows that fostering globalization through trade openness is an efficient tool to alleviate the positive effect of financial inclusion on the quality of the environment. The study employs various policies targeting the control of development levels, energy consumption, natural resource utilization, industry, and urban population dynamics to contextualize the influence of financial inclusion on environmental sustainability. Through econometric methods and a comprehensive examination of the specified time frame, our results provide insights into the complex interplay between financial inclusion and environmental outcomes in diverse socio-economic contexts. The research contributes to the discourse on sustainable development by highlighting the potential of certain factors as a catalyst for environmental improvement. Understanding these dynamics is crucial for policymakers, as it underlines the trade-off between integrating inclusive financial strategies and achieving environmentally sustainable development trajectories in emerging and developing nations. Moreover, shedding light on the underlying mechanisms, such as trade-offs, fills a significant gap in the literature.
Purpose
This paper aims to examine the impact of corruption on bank stability and bank profitability separately for Islamic banks as well as conventional banks. Moreover, it also investigates whether the existence of Islamicity and corruption in the environment can moderate the Islamic banks-stability and Islamic banks-profitability relationships.
Design/methodology/approach
Sample of the study consists 136 banks comprising 70 Islamic and 66 conventional banks over the period 2015–2021 from nine countries with dual banking systems. Panel data fixed effect estimator with year effects is used to estimate the results.
Findings
Results of the study show that Islamicity is positively and corruption is negatively related to bank stability as well as bank profitability. Further, it is found that the effect of corruption is significantly different between Islamic and conventional banks, wherein conventional banks are more adversely affected than Islamic banks. However, an insignificant difference between Islamic and conventional banks is observed in the case of Islamicity.
Practical implications
The study provides theoretical and practical implications. On theoretical side, the study presents Islamicity as more reliable measure of religiosity based on Islamic values that can help in control of corruption by moderating corruption-bank stability nexus especially in dual banking economies which have high share of Muslim population. On practical side, the study recommends policy and operational measures for mitigating corruption aiming bank stability.
Originality/value
The results of this study contribute to the corruption-finance, religion-finance and dual banking literature. This study suggests that regulators and bank management must consider corruption and Islamicity while formulating their policies for better bank performance/stability.
The paper explores the relationship between the shadow economy, corruption, and taxes in 25 high-financial developed countries (HFDCs) and 30 low-financial developed countries (LFDCs) using the PVAR method. The results of the impulse-response function show that the corruption perception index (CPI) has a positive correlation with tax revenue and the shadow economy in HFDCs, while tax revenue and the shadow economy are negatively correlated. In contrast, in LFDCs, the shadow economy has a positive correlation with tax revenue and a negative correlation with the CPI. In addition, the study also suggests that there is no relationship between tax revenue and the CPI. From the above findings, we propose several related policies for each group of countries.
This paper examines the effect of corruption on the discouragement of SMEs on the credit market in certain African countries. To do so, a sample of 13,635 firms from 26 countries observed over the period 2010–2022 was selected. The results obtained from the OLS, Probit and IV-Probit estimations show that corruption has a positive and significant effect on the discouragement of SMEs. These results are robust to the use of alternative measures of corruption and discouragement. The main economic policy recommendation arising from our study is the introduction and strengthening of anti-corruption measures. These include measures to increase the efficiency of the judicial system, reduce court delays and introduce clear credit-granting procedures to improve the transparency of the process. This will increase firms' confidence in the banking system and make them less reluctant to apply for credit when they need it. More specifically, public authorities can encourage banks to put in place a plan to detect and prevent corruption and influence peddling, based on a set of internal procedures. This involves mapping the risks of corruption, influence peddling and conflicts of interest, and drawing up rules of ethics and good conduct.
Research Question/Issue
We investigate whether the risk‐taking of Islamic banks is affected differently by corruption compared to conventional banks. We also examine whether the characteristics of the Shari'ah Supervisory Board (SSB) of Islamic banks and the characteristics of the board of directors of conventional banks play an effective role in moderating such an effect.
Research Findings/Insights
We find consistent evidence that banks in countries with higher corruption have higher bank risk for both conventional and Islamic banks. However, this association is attenuated by the size of the SSB, the presence of female board members, and higher academic qualifications of SSB members. For conventional banks, the moderating effect of the presence of female directors and academically qualified members on the board of directors is also prevalent but to a lesser extent.
Theoretical/Academic Implications
This study contributes to the corporate finance literature more generally by highlighting the role played by corporate governance, particularly the presence of female members and academically qualified members on the SSBs of Islamic banks and on the board of directors of conventional banks, in mitigating the effect of corruption on bank risk‐taking for the two bank types.
Practitioner/Policy Implications
Our findings are based on a matched sample of banks operating in 10 OIC (Organization of Islamic Cooperation) countries and have important implications for bank stability and bank governance reforms. On the detrimental side, urgency of the anti‐corruption campaigns in these countries is justified due to the significant effect of corruption on risk‐taking for both conventional and Islamic banks. Overall, to better fight corruption in countries with dual banking systems, there is a need to enforce stricter rules for all types of banks.
Purpose
This paper aims to study the effect of country-level perceptions of corruption on commercial banks’ lending activity over the importance of loans and the quality of loan portfolios of banks in Europe.
Design/methodology/approach
The paper uses country-level perceptions of corruption scores from Transparency International, individual bank-specific data from ORBIS and macroeconomic data from the World Bank. The sample is composed of 640 commercial banks in 42 European countries from 2013 to 2019. The authors estimate, by pooled OLS, the relationship between corruption and the importance of loans and the quality of the banks’ loan portfolios. In addition, several robustness tests reinforce the results.
Findings
The results show that corruption negatively impacts the importance of loans in bank assets and positively impacts the proportion of bad loans. In addition, trade openness increases the weight of loans and the weight of nonperforming loans. Bank size, capital and risk also affect bank lending activity. Finally, European Monetary Union (EMU) membership reinforces the negative (positive) effect on loans (bad loans).
Research limitations/implications
The results highlight the importance of fighting corruption. Governments, regulators and banks benefit from pursuing transparency-oriented policies to decrease the perception of corruption and foster economic development.
Originality/value
The literature on the impact of corruption on bank lending activity focuses mainly on high-corruption countries. This paper studies the European case, scarcely investigated in the literature, in the aftermath of two international financial crises and when significant regulatory transformations in banking supervision were instituted in the EMU countries.
This study focuses on the banking systems evaluation in Portugal, Italy, Ireland, Greece and Spain (known as the PIIGS) during the financial and post-financial crisis period from 2009 to 2018.
A conditional robust nonparametric frontier analysis (order-m estimators) is used to measure banking efficiency combined with variables highlighting the effects of Non-Performing Loans. Next, a truncated regression is used to examine if institutional, macroeconomic, and financial variables affect bank performance differently. Unlike earlier studies, we use the Corruption Perception Index (CPI) as an institutional variable that affects banking sector efficiency.This research shows that the PIIGS crisis affects each bank/country differently due to their various efficiency levels. Most of the study variables — CPI, government debt to GDP ratio, inflation, bank size — significantly affect banking efficiency measures. The contribution of this article to the relevant banking literature is two-fold. First, it analyses the efficiency of the PIIGS banking system from 2009 to 2018, focusing on NPLs. Second, this is the first empirical study to use probabilistic frontier analysis (order-m estimators) to evaluate PIIGS banking systems.
This study examines the effect of corruption, regulations, and transparency on banking sector performance using a sample of 309 banks from 15 Asian countries over the period 2010 to 2020. Banking sector performance is measured in terms of both bank profitability and bank stability in the present study. Generalized method of moments (GMM) dynamic panel estimation procedure is applied for empirical analysis . The findings of the study suggest that transparency has positive effect on both bank profitability and bank stability, while regulation has positive effect only on banks stability. In contrast, corruption is negatively related to both bank profitability and bank stability. Furthermore, the findings reveal that corruption indirectly increases bank crisis by decreasing bank’s lending through excessive risk. In addition, the significant role of macroeconomic shocks in determining banking sector performance is observed in Asian countries. The study is in favor of effective regulatory system to control the adverse effect of corruption on banking sector performance.
Purpose
This study aims to analyze the effect of female top management and female dominant owner on whether firms experience obstacles to obtaining external finance in 136 medium- and low-income countries during 2006–2019. The analysis controls for the role of corporate governance and other firm-specific characteristics, as well as for the impact of national institutions.
Design/methodology/approach
The analysis elucidates the economic and non-economic factors driving female corporate leadership. Further, in order to capture the causal effect, the analysis uses univariate tests, multivariate regression analysis, disaggregation testing, sensitivity and endogeneity analysis to confirm the quality of the estimates. The analysis controls for various additional country-level factors.
Findings
The results show that female top management and female ownership are broadly significant determinants of firms' access to external finance, especially in relatively larger and more developed countries. The role of controlling shareholders is significant and mediates the gender effect. The latter appears more pronounced in smaller and medium-size firms, operating in the manufacturing and services sectors as well as in the countries with higher levels of development. This also varies with the countries' macroeconomic conditions and institutions governing gender development and equality as well as institutional governance effectiveness.
Practical implications
The results suggest that firms wishing to improve the firms' access to external finance should consider the role of gender in both top management and corporate ownership coupled with the effect of the specific characteristics of firms and the conditioning role of national institutions.
Originality/value
The study examines the gender effects of top management and dominant ownership for the external financing decisions of firms in low- and middle-income countries, which are underresearched. These gender effects are mitigated in various ways by the specific characteristics of firms and especially on national institutions.
This chapter reviews the literature focusing on corruption disclosure and describes the most important theoretical frameworks that can be adopted to examine this type of disclosure with specific reference to the banking sector. Corruption disclosure is particularly important because banks’ involvement in corruption scandals may trigger a domino effect resulting in a loss of trust in the whole financial system. In this chapter, we show that this strand of literature is mainly focused on non-financial firms, while the analysis of the banking sector has been largely neglected. Based on the main theoretical frameworks adopted in disclosure studies, we contend that the stakeholder theory, the legitimacy theory, and the signaling theory could represent important points of reference to give momentum to this promising field of research.KeywordsDisclosureBankingCorruptionJEL CodesG21M14M41
Using the Generalized Method of Moments (GMM), this study examines the influence of institutional quality on the impact of financial inclusion on the stability of 157 banks in 8 ASEAN countries from 2010 to 2020. The results show that financial inclusion negatively hurts bank stability, and this effect will be improved if it is implemented in an environment of good institutional quality. This is verified again in terms of institutional quality aspects. Corruption control, political stability, government efficiency, and the rule of law have positive effects, while regulatory quality has negative effects. The results are consistent across all three measures of bank stability, Zscore, standardized Zscore, and non-performing loans (NPL). With the above results, the study recommends that national governments take steps to improve institutional quality to increase the stability of banks in promoting financial inclusion.
Data from surveys of small and medium-sized enterprises (SMEs) in Vietnam from 2005 to 2015 were used in this paper to examine the effects of bribery on survival probability for firms that face market competition, credit constraints, and institutional limitations. Our baseline function was derived from three distributional assumptions: the semi-parametric Cox proportional hazard model (Cox), and two parametric specifications: Weibull and exponential. Two forms of bribery are investigated, including greasing and rent-seeking bribes. There were two categories of credit constraints we examined: those who have been denied formal loans (credit rationed) and individuals who have refrained from applying for formal loans because the application process is difficult or the interest rates are too high (discouraged borrowers). We use self-evaluations of firms to examine their responses to the uncertainty of government policy and the competitive environment. The results provided empirical support for the "greasing-the-wheels" theory of firm survival. Further, these effects were more pronounced for large firms, but they were only apparent for those that were formally registered, since they had greater bargaining power with public officials. The importance of bribery in reducing the risk to exit was only evident for firms facing no credit and institutional constraints and having low level of market competition.
Presence of corruption in a system is always a path breaker for transparent distribution of public services in the economy. Therefore, controlling corruption is a high priority for progress of a country’s growth. The main objective of this study was to empirically examine the impacts of financial inclusion on control of corruption in selected upper-middle and lower-middle income countries. Using cross-country annual data from 2004 to 2018, the study applied fixed effect, random effect, panel corrected standard errors, feasible general least square and 2SLS (two-stage least-squares regression) models to evaluate the impacts of financial inclusion on control of corruption across all samples from upper-middle and lower-middle income countries. The results from the upper-middle income (UMI) countries demonstrated that a basic level of financial inclusion has no impact on the control of corruption, whereas higher intensification of financial inclusion beyond the basic level positively impacts it. Similarly, the findings from lower-middle-income (LMI) countries indicated that financial inclusion up to a certain threshold level helps to control corruption, whereas financial inclusion above the threshold level negatively impacts the control of corruption. These empirical findings suggest that in the overall sample, financial inclusion plays an important role to control corruption.
The lack of developed financial markets and well-functioning transmission channels assigns monetary aggregates in emerging economies the potential role of nominal anchor, intermediate target, or informational variable for monetary policy. The effectiveness of this approach relies crucially on the correct measurement of money, which is not fulfilled by the conventional index based on the simple sum of financial assets. This paper calculates alternative Divisia monetary aggregates for Russia over the period 1998-2019, which account for the level of liquidity of a given monetary asset by assigning weights according to the usefulness of that asset for transaction services. Divisia is found to follow a markedly different growth pattern from the simple sum, whereby deviations between the two series are even more pronounced when foreign currency accounts are included. We conduct three empirical exercises to demonstrate the advantages of Divisia over the simple sum. Divisia confirms the stability of the money demand function and reflects portfolio shifts in response to changes in the opportunity cost of money. Divisia-based GDP nowcasting performs better in times of financial turmoil than the simple sum. Lastly, Divisia mitigates the price puzzle phenomenon relative to the conventional measure. We conclude that Divisia monetary aggregates would improve the effectiveness of monetary policy in Russia.
Purpose
This paper aims to explore the drivers of banking stability in the case of QISMUT+3 countries (Qatar, Indonesia, Saudi Arabia, Malaysia, United Arab Emirates, Turkey, Pakistan, Kuwait and Bahrain) focusing on social and governmental responsibility (SGR) determinants. Both main indicators of banking stability, namely, profitability and nonperforming loans, were treated as dependent variables. The model is examined with the whole sample and separately by examining commercial banks and Islamic banks.
Design/methodology/approach
Cross-country bank-level panel data spanning from 2011 to 2018 is used. Two-step system generalized methods of moments alongside both panel-corrected standard error and feasible generalized least squares models were applied to ensure the robustness of the results.
Findings
Findings reveal that capital adequacy and corruption control are the most dominant determinants of banking profitability in the studied sample regardless of the type of the bank. In addition, profitability, efficient management, inflation and government effectiveness were found to be the main drivers of financial vulnerability risk.
Practical implications
Findings of this study offer many insights and policy implications to help stakeholders gain a comprehensive understanding of banking stability. Suggested policy implications targeting bank management, governmental policymakers and investors are offered to better the banking stability of QISMUT+3 countries.
Originality/value
This paper has multiple contributions to the existing literature. The determinants of banking stability are examined in QISMUT+3 group of countries which is the focus of a limited number of studies. In addition, the use of a comprehensive variable set alongside the addition of SGR determinants in the case of banking system stability is one of the main contributions of this paper.
In this study, we use a panel vector autoregression approach to investigate how financial stability, measured by nonperforming loans (NPLs), interacts with profitability, leverage, loan growth, and economic growth in an improving or worsening corruption framework. The results underline the effects of changes in corruption on banks’ management quality and on the time-persistence of NPLs. A shock to NPLs reduces profitability, loan growth, and GDP. In a worsening corruption environment, these effects are stronger and more time-persistent, confirming the distorting effects of corruption on financial stability and growth. In contrast, NPLs decline due to a shock to profitability, leverage, and GDP.
This study investigated the effects of corruption and economic freedom on corporate leverage. We also evaluated how economic freedom shapes the effect of corruption on corporate leverage. Using a sample of Vietnamese firms covering a nine-year period from 2010 to 2018, we find evidence that increased control of corruption has a significant positive impact on firm leverage, whereas the opposite is true for economic freedom. This effect is robust to alternative measures of control of corruption as well as advanced estimation methods, such as firm-fixed effects and quantile regressions. Our results also reveal that the positive impact of corruption controls on corporate leverage is more pronounced for firms with high economic freedom. Econometrically, our findings indicate that firms with better control over corruption prefer debt financing, as demonstrated by their higher leverage ratio.
This study assesses the impact that credit bureaus can have on the occurrence of banking crises, using data for 32 countries over the period 2004-2016 while considering the interference effect of corruption. Different levels of income are considered in order to check for the stability of the relationship. We also test for the existence of a threshold effect driving the credit bureau-banking stability nexus. Estimation outcomes suggest that more credit bureaus are correlated with less banking instability. Moreover, estimation outcomes show that curbing corruption improves the quality of information on delinquent borrowers shared among these institutions and can thus enhance the soundness of the banking system. Our findings also report the existence of a nonlinear relationship in the private and public credit bureaus and banking stability nexus.
In this paper, we examine the extent to which corruption affects the loan portfolio of microfinance institutions (MFIs). We employ robust econometric estimation on a sample of 507 MFIs across 63 countries from 2005 to 2018. Our results show that corruption is negatively associated with the loan portfolio. However, in semiparametric analysis, we find that lower‐level corruption is beneficial to increase the loan portfolio while higher‐level corruption is detrimental. The results imply that it is not just corruption that matters as far as its effect on MFIs' loan portfolio is concerned; what matters is the degree of corruption. In further analyses, we find that corruption reduces both the number of active borrowers and average loan per borrower indicating that corruption reduces both coverage and amount of credit extension. The results suggest that the effect of corruption on the loan portfolio is gender‐sensitive. Corruption facilitates an increase in loans to female borrowers. Our results are robust to alternative variable measurements and different identification strategies, including two‐stage least square.
Using data on 17 listed public banks from Russia over the period 2008 to 2016, we analyze whether international oil prices affect the bank stability in an oil-dependent country. We resort to a Pool Mean Group (PMG) estimator, and we show that an increase in oil prices has a long-run positive effect on Russian public banks stability. While positive oil-price shocks contribute to bank stability in the long run, an opposite effect is recorded for negative shocks. However, no significant impact is documented in the short run. Our findings are robust to different bank stability specifications and different samples.
Résumé L’objectif de l’article est d’analyser la concurrence bancaire en Russie en mesurant le pouvoir de marché des banques russes et ses déterminants sur la période 2001-2006 avec l’indice de Lerner. Nous trouvons que la concurrence bancaire ne s’est que légèrement améliorée sur la période étudiée. L’indice de Lerner moyen pour les banques russes est du même ordre de grandeur que ceux observés dans les pays développés, ce qui suggère que le secteur bancaire russe ne souffre pas d’une concurrence faible. Par ailleurs, nous n’observons pas de pouvoir de marché plus élevé pour les banques publiques, ni de pouvoir de marché pour les banques étrangères. Enfin, notre analyse des déterminants du pouvoir de marché permet l’identification de plusieurs facteurs qui influencent la concurrence, notamment la concentration et le risque ainsi que l’influence non-linéaire de la taille. Classification JEL : G21 ; P34.
We investigate long-run firm-level productive growth and technological changes and relate these to the formal and informal institutions and related factors. We conclude that persistency of easing of regulations through broader reforms, including privatization and perception of non-reversal of reforms, helped firms achieve prolonged productivity gains—led by technological changes alongside a socially desirable reduction in CO2 emissions due to energy saving, as well as increased labour usage, despite variations in the quality of formal and informal institutions. Broadly, both formal and informal institutions matter for all firms irrespective of productivity levels and technological gains. Government stability, the country's investment climate, socio-economic conditions, and corruption perception are essential in determining long-run productivity growth and technological changes. However, the role of law and order conditions, political constraints, and competitiveness of the political system/process in determining productivity gains and technological improvements varies by firms’ characteristics.
This paper uses survey data of small and medium-sized enterprises (SMEs) in Vietnam, from 2011 to 2015, to examine the effects of bribery on environmental innovation decisions by firms, accounting for the roles of bargaining power and/or credit and institutional constraints. In the study, bribery activities are categorized into greasing and rent-seeking forms. Self-assessment of firms on the uncertainty of government policies and the competition environment is used to capture institutional constraints, while firm size and legal registration status are used to represent bargaining power. The group of credit-constrained firms is further broken down into those that have demand for more loans and those not currently looking for a loan application. Our empirical results provide evidence that greasing bribery has a positive effect on firms' decisions about implementation of environmental innovation (the “greasing-the-wheels” hypothesis) while there is no impact from rent-seeking bribery. The positive effect of greasing bribery is particularly sizable for large, formally registered firms, or those facing no credit constraints, while specific types of institutional constraints that firms perceive as obstacles to their growth also affect the magnitude of the impact. Lastly, when endogeneity is controlled, the effect of greasing bribery becomes more pronounced and there is evidence on the “sanding-the-wheels” hypothesis of rent-seeking bribery.
This paper examines the impact of corruption, economic freedom, bank regulation and transparency on bank profitability and bank stability using a sample of 326 banks from the 19 Eurozone countries over the period 2005–2018. We use a balanced panel data set and the Arellano-Bond Generalized Method of Moments dynamic panel estimation procedure. We find that corruption and transparency have a negative effect on bank profitability and bank stability. By contrast, greater economic freedom boosts profitability and banking stability. Our results show that regulation is positively related to bank profitability and its precise effects on stability depend upon the nature of the regulation. We additionally examine how our results are affected by Governance issues and the addition of 5 other European countries from outside the Eurozone. Our overall results indicate that the impact of the variables of interest is sensitive to the precise measures chosen to calculate profitability and financial stability.
This study explores the impact of countrywide corruption on the credit risk of commercial banks with different levels of credit risk. It applies the quantile regression (QR) estimation method for a panel data of 191 commercial banks, from 18 MENAP countries, between the years 2011–2018. The research finding indicates that corruption significantly exacerbates the problem of bad loans of banks. Furthermore, the QR results reveal that corruption does not affect all banks at the same level. Banks in higher quantiles (i.e., higher credit risk banks) appear to be affected more than the ones in lower quantiles (i.e., lower credit risk banks).Banks with high credit risk appear to be more vulnerable to corruption than banks with low credit risk.
Subject. This article analyzes the activities of the Central Bank of the Russian Federation. Objectives. The article aims to reveal the type of activity of the Bank of Russia in the modern economy. Methods. The study is based on the systems approach and statistical analysis. Results. The article assesses the changes in summarizing financial indicators presented on the official website of the Bank of Russia. As a result of the assessment, it reveals the Bank of Russia's activities to maintain a stable level of mandatory reserves for the funds raised by credit organizations in the domestic currency. The study describes the typed activities of the Bank of Russia. Conclusions and Relevance. The identified typed activity of the Bank of Russia indicates the need to remove the priority in retaining the reserve position in the IMF, thereby expanding the ability of the Russian Ministry of Finance to cover the budget deficit through federal loan bonds. The results of the study form the necessary level of competence of State authorities to make management decisions to eliminate inconsistencies in the activities of the Bank of Russia in the constitutional and legal status.
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.
Purpose – The purpose of this paper is to evaluate the impact of financial inclusion (FI) on control of corruption in selected African countries.
Design/methodology/approach – The study employs secondary data spanning over a period of 2005–2016. These data are sourced from IMF’s International Financial Statistics, World Bank Development Indicators, Global Financial Development Database, Transparency International and International Country Risk Guide. The authors use Sarma (2008) approach to construct the FI index for 13 countries in Africa. The authors apply
random effect, robust least square and instrumental variable (IV) estimations to examine the impact of FI on control of corruption in Africa.
Findings – The author finds that financial inclusion improves the control of corruption. The author also tests for possible FI threshold to avoid the case of extreme FI in Africa. The results show that there is a threshold level if reached, FI would have negative impacts in the control of corruption. This may likely happen mainly due to weak institutions in Africa. The results are robust to alternative proxy for control of corruption and various alternative estimation techniques.
Practical implications – The finding indicates that FI can serve as part of toolkits for reducing corruption in Africa.
Originality/value – This study stresses the important role of FI in the economic system. It is the first paper that empirically suggests the role of FI in controlling corruption in Africa.
Existing literature suggests that microfinance institutions (MFIs) are likely to operate in different institutional environments. Unlike retail banks, MFIs bridge two institutional settings: the formal environment, in which they source their funding and in which they are legally embedded, and the informal environment, in which they operate. This study contributes to a growing literature on microfinance performance by investigating whether the institutional environment of the host country matters for MFIs performance. Using panel data corresponding to 167 MFIs for the period 1997-2008, System GMM Estimator is applied to determine the extent to which institutions affect microfinance performance. Estimation results reveals that MFIs profitability is non-negligibly driven by the surrounding institutional environment. Specifically, MFIs are more profitable in countries with political stability, effective and predictable rule of law. However, the magnitude of the effect is sensitive to MFIs age.
JEL classification: E02; G21
This paper adds to the extant literature by using cross-country data for about 100 nations to examine the role of historical factors, geographic influences and the government on corruption. Important innovations include considering a wide set of historical, geographical and government determinants of corruption and examining some of the previously considered determinants at a finer level of detail. Two key questions addressed are: What are the effects of the size and scope of government on the incidence of corruption across countries? How important are historical and geographic influences in affecting corruption? Overall, the answer to the first question is that government does matter in important ways in its impact on corruption. Both the size and scope of government matter. Regarding the second question, the historical inertia of institutions that induce corruption persists, as do rent-seeking opportunities in new countries. Some geographic factors, on the other hand, can mitigate corruption. Policy implications are discussed.
This paper assesses the relationship between the impact of corruption on growth and investment and the quality of governance in a sample of 63 to 71 countries between 1970 and 1998. Like previous studies, we find a negative effect of corruption on both growth and investment. Unlike previous studies, we find that corruption has a negative impact on growth independently from its impact on investment. These impacts are, however, different depending on the quality of governance. They tend to worsen when indicators of the quality of governance deteriorate. This supports the “sand the wheels” view on corruption and contradicts the “grease the wheels” view, which postulates that corruption may help compensate bad governance. Copyright Springer Science + Business Media, Inc. 2005
This paper shows empirically that China’s trade balance is sensitive to fluctuations in the real effective exchange rate of the renminbi, although the size of the surplus is such that exchange rate policy alone will be unable to address the imbalance. One of the main reasons why the reduction in the trade surplus is limited is that Chinese imports are reduced with a real appreciation of the renminbi. By estimating bilateral import equations, we find that it is imports from other Southeast Asian countries which fall. This result reflects the vertical integration of Southeast Asia with China through the 'Asian production network'. We find, in turn, that imports from Germany – which serve China’s domestic demand – behave as one would expect, ie they increase with renminbi real appreciation. All in all, our results raise concerns on the impact of renminbi appreciation on Southeast Asia even if regional currencies do not follow the renminbi’s upward trajectory.
URL: https://www.bis.org/repofficepubl/arpresearch200703.2.pdf
Using a sample of forty-nine countries, the authors show that countries with poorer investor protections, measured by both the character of legal rules and the quality of law enforcement, have smaller and narrower capital markets. These findings apply to both equity and debt markets. In particular, French civil law countries have both the weakest investor protections and the least developed capital markets, especially as compared to common law countries. Coauthors are Florencio Lopez-de-Silanes, Andrei Shleifer, and Robert W. Vishny. Copyright 1997 by American Finance Association.
Customer relationships arise between banks and firms because, in the process of lending, a bank learns more than others about its own customers. This information asymmetry allows lenders to capture some of the rents generated by their older customers; competition, thus, drives banks to lend to new firms at interest rates that initially generate expected losses. As a result, the allocation of capital is shifted toward lower quality and inexperienced firms. This inefficiency is eliminated if complete contingent contracts are written or, when this is costly, if banks can make nonbinding commitments that, in equilibrium, are backed by reputation. Copyright 1990 by American Finance Association.
Why is corruption-defined here as the misuse of public office for private gain-perceived to be more widespread in some countries than others? Different theories associate cross-national variation in the extent of corruption with particular historical and cultural traditions, levels of economic development, political institutions, and government policies. This article analyzes which of various plausible determinants are significantly related to several indexes of "perceived corruption" compiled from business risk surveys for the early-1980s and mid-1990s. It finds support for six arguments. Countries with Protestant traditions, histories of British rule, more developed economies, and (probably) those with high exposure to imports were rated less "corrupt". Federal states were more "corrupt" than unitary ones. While the current degree of democracy was not significant, long exposure to democracy was associated with lower corruption.
Do well-functioning stock markets and banks promote long-run economic growth? This paper shows that stock market liquidity and banking development both positively predict growth, capital accumulation, and productivity improvements when entered together in regressions, even after controlling for economic and political factors. The results are consistent with the views that financial markets provide important services for growth and that stock markets provide different services from banks. The paper also finds that stock market size, volatility, and international integration are not robustly linked with growth and that none of the financial indicators is closely associated with private saving rates. Copyright 1998 by American Economic Association.
The paper seeks to add to the existing literature on aggregate and private savings by focusing on transition economies. We use panel data over the period 1989-1998 and estimate a fixed-effects model. In Central Eastern European Countries, aggregate and private savings are driven by almost the same forces - this is the central focus of the paper. The most important factor behind both types of saving is income. Furthermore, it is shown that domestic saving and foreign capital are not operating as substitutes. This is an indicator for the rudimentary integration into the international financial market.
Corruption in the public sector erodes tax compliance and leads to higher tax evasion. Moreover, corrupt public officials abuse their public power to extort bribes from the private agents. In both types of interaction with the public sector, the private agents are bound to face uncertainty with respect to their disposable incomes. To analyse effects of this uncertainty, a stochastic dynamic growth model with the public sector is examined. It is shown that deterministic excessive red tape and corruption deteriorate the growth potential through income redistribution and public sector inefficiencies. Most importantly, it is demonstrated that the increase in corruption via higher uncertainty exerts adverse effects on capital accumulation, thus leading to lower growth rates.
This paper will discuss eight frequently asked questions about public corruption: (1) what is corruption; (2) which countries are the most corrupt; (3) what are the common characteristics of countries with high corruption; (4) what is the magnitude of corruption; (5) do higher wages for bureaucrats reduce corruption; (6) can competition reduce corruption;( 7) why have there been so few (recent) successful attempts to fight corruption; and (8) does corruption adversely affect growth?
According to basic economics, if demand exceeds supply, prices will rise, thus decreasing demand or increasing supply until demand and supply are in equilibrium; thus if prices do their job, rationing will not exist. However, credit rationing does exist. This paper demonstrates that even in equilibrium, credit rationing will exist in a loan market. Credit rationing is defined as occurring either (a) among loan applicants who appear identical, and some do and do not receive loans, even though the rejected applicants would pay higher interest rates; or (b) there are groups who, with a given credit supply, cannot obtain loans at any rate, even though with larger credit supply they would. A model is developed to provide the first theoretical justification for true credit rationing. The amount of the loan and the amount of collateral demanded affect the behavior and distribution of borrowers. Consequently, faced with increased credit demand, it may not be profitable to raise interest rates or collateral; instead banks deny loans to borrowers who are observationally indistinguishable from those receiving loans. It is not argued that credit rationing always occurs, but that it occurs under plausible assumptions about lender and borrower behavior. In the model, interest rates serve as screening devices for evaluating risk. Interest rates change the behavior (serve as incentive mechanism) for the borrower, increasing the relative attractiveness of riskier projects; banks ration credit, rather than increase rates when there is excess demand. Banks are shown not to increase collateral as a means of allocating credit; although collateral may have incentivizing effects, it may have adverse selection effects. Equity, nonlinear payment schedules, and contingency contracts may be introduced and yet there still may be rationing. The law of supply and demand is thus a result generated by specific assumptions and is model specific; credit rationing does exist. (TNM)
During the 1990s, Russia underwent an extraordinary transformation from a communist dictatorship to a multi-party democracy, from a centrally planned economy to a market economy, and from a belligerent adversary of the West to a cooperative partner. Yet a consensus in the US circa 2000 viewed Russia as a disastrous and threatening failure, and the 1990s as a decade of catastrophe for its citizens. Analyzing a variety of economic and political data, we demonstrate a large gap between this perception and the facts. In contrast to the common image, by the late 1990s Russia had become a typical middle-income capitalist democracy.
The paper investigates the effect of legal change on the lending behavior of banks in twelve transition economies. First,
we find that banks increase the supply of credit subsequent to legal change. Second, changes in collateral law matter more
for increases in bank lending than do changes in bankruptcy law. We attribute this finding to the different functions of collateral
and bankruptcy law. While the former enhances the likelihood that individual creditors can realize their claims against a
debtor, the latter ensures an orderly process for resolving multiple, and often conflicting, claims after a debtor has become
insolvent. Finally, we find that foreign-owned banks respond more strongly to legal change than incumbents.
We study whether bank efficiency is related to bank ownership in Russia. We find that foreign banks are more efficient than domestic private banks and, surprisingly, that domestic private banks are not more efficient than domestic public banks. These results are not driven by the choice of production process, the bank’s environment, management’s risk preferences, the bank’s activity mix or size, the econometric approach, or the introduction of deposit insurance. The policy conclusion is that the efficiency of the Russian banking system may benefit more from increased levels of competition and greater access of foreign banks
than from bank privatization.
We study how foreign bank penetration affects financial sector development in poor countries. A theoretical model shows that when domestic banks are better than foreign banks at monitoring soft information customers, foreign bank entry may hurt these customers and worsen welfare. The model also predicts that credit to the private sector should be lower in countries with more foreign bank penetration, and that foreign banks should have a less risky loan portfolio. In the empirical section, we test these predictions for a sample of lower income countries and find support for the theoretical model.
We propose exploiting the term structure of relative interest rates to obtain estimates of changes in the timing of a currency crisis as perceived by market participants. Our indicator can be used to evaluate the relative probability of a crisis occurring in one week as compared to a crisis happening after one week but in less than a month. We give empirical evidence that the indicator performs well for two important currency crises in Eastern Europe: the crisis in the Czech Republic in 1997 and the Russian crisis in 1998. Copyright (c) 2010 The Authors. Journal compilation (c) 2010 The European Bank for Reconstruction and Development.
This paper examines how the legal environment affects financial development, and then asks how this in turn is linked to long-run economic growth. Financial intermediaries are better developed in countries with legal and regulatory systems that (1) give a high priority to creditors receiving the full present value of their claims on corporations, (2) enforce contracts effectively, and (3) promote comprehensive and accurate financial reporting by corporations. The data also indicate that the exogenous component of financial intermediary development—the component defined by the legal and regulatory environment—is positively associated with economic growth. Journal of Economic Literature Classification Numbers: G21, K12, O16
In Russia, compliance with the rules and regulations that govern almost all aspects of economic life has created a hostile environment for microenterprises. More serious than the regulations per se, however, is the potential niche they create for opportunistic behavior by regulatory authorities. In Russia, the regulatory state has created a corrupt cadre of government bureaucrats who frequently engage in rent-seeking behavior while enforcing regulations. Firms are not uniformly affected by corruption, however. This paper shows empirical evidence of differential incidence of extortion, based on firm and entrepreneurial characteristics. Corruption in Russia is similar to a regressive tax, and acts as a disincentive to innovation and growth, it may induce technologically inefficient production decisions, and can dilute economies of scale and scope.
This paper describes the institutions and social norms that have accommodated corruption in the Russian Federation in the post-transition years. We show how corruption is sustained by ill-defined boundaries between political and private business activity, and how the role of the state facilitates rather than hinders corruption. The paper draws upon a longer document prepared by the authors, the IDEM Report on Corruption on Russia [IDEM Foundation, 1998. Russia versus Corruption: Who Will Win?, Council of Foreign and Defense Policy, Moscow. (in Russian)].
This paper provides a survey on studies that analyze the macroeconomic effects of intellectual property rights (IPR). The first part of this paper introduces different patent policy instruments and reviews their effects on R&D and economic growth. This part also discusses the distortionary effects and distributional consequences of IPR protection as well as empirical evidence on the effects of patent rights. Then, the second part considers the international aspects of IPR protection. In summary, this paper draws the following conclusions from the literature. Firstly, different patent policy instruments have different effects on R&D and growth. Secondly, there is empirical evidence supporting a positive relationship between IPR protection and innovation, but the evidence is stronger for developed countries than for developing countries. Thirdly, the optimal level of IPR protection should tradeoff the social benefits of enhanced innovation against the social costs of multiple distortions and income inequality. Finally, in an open economy, achieving the globally optimal level of protection requires an international coordination (rather than the harmonization) of IPR protection.
Standard real business cycle models must rely on total factor productivity (TFP) shocks to explain the observed comovement of consumption, investment, and hours worked. This paper shows that a neoclassical model consistent with observed heterogeneity in labor supply and consumption can generate comovement in the absence of TFP shocks. Intertemporal substitution of goods and leisure induces comovement over the business cycle through heterogeneity in the consumption behavior of employed and unemployed workers. This result owes to two model features introduced to capture important characteristics of U.S. labor market data. First, individual consumption is affected by the number of hours worked: Employed agents consume more on average than the unemployed do. Second, changes in the employment rate, a central factor explaining variation in total hours, affect aggregate consumption. Demand shocks--such as shifts in the marginal efficiency of investment, as well as government spending shocks and news shocks--are shown to generate economic fluctuations consistent with observed business cycles.
A voluminous literature seeks to explore the relation between law and finance, but offers little insights into dynamic relation between legal change and behavioral outcomes or about the distributive effects of law on different market participants. The current paper disentangles the law-finance relation by using disaggregate data on banks’ lending patterns in 12 transition countries over a 8 year period. This allows us to control for country level heterogeneity and differentiate between different types of lenders. Employing a differences-in-differences methodology in an exclusive ”laboratory” setting as well as unique hand collected datasets on legal change as well as changes in bank ownership, we find that lending volume responds positively to legal change. However, not all legal change is equally effective. The introduction of a legal regime that enhances each lender’s individual prospects of enforcing her claims (collateral law) results in greater increases in lending volume than changes in bankruptcy law, the essence of which is to provide an orderly liquidation or reorganization process in the presence of multiple creditors. Finally, we find that banks that newly enter the market respond more strongly to legal change than do incumbents. In particular, foreign-owned banks extend their lending volume substantially more than domestic banks.
Corruption by the politically connected is often blamed for economic ills, particularly in less developed economies. Using a loan-level data set of more than 90,000 firms that represents the universe of corporate lending in Pakistan between 1996 and 2002, we investigate rents to politically connected firms in banking. Classifying a firm as "political" if its director participates in an election, we examine the extent, nature, and economic costs of political rent provision. We find that political firms borrow 45 percent more and have 50 percent higher default rates. Such preferential treatment occurs exclusively in government banks-private banks provide no political favors. Using firm fixed effects and exploiting variation for the same firm across lenders or over time allows for cleaner identification of the political preference result. We also find that political rents increase with the strength of the firm's politician and whether he or his party is in power, and fall with the degree of electoral participation in his constituency. We provide direct evidence against alternative explanations such as socially motivated lending by government banks to politicians. The economy-wide costs of the rents identified are estimated to be 0.3 to 1.9 percent of GDP every year. Copyright (c) 2005 Massachusetts Institute of Technology.
This paper analyzes a newly assembled data set consisting of subjective indices of corruption, the amount of red tape, the efficiency of the judicial system, and various categories of political stability for a cross section of countries. Corruption is found to lower investment, thereby lowering economic growth. The results are robust to controlling for endogeneity by using an index of ethnolinguistic fractionalization as an instrument. Copyright 1995, the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
This paper, a synthesis of salient findings of the authors’ book entitled “Investment Climate Around the World: Voices of the Firms from the World Business Environment Survey”, and based on a chapter in “Pathways Out of Poverty: Private Firms and Economic Mobility in Developing Countries”, by G. Fields and G. Pfeffermann, summarizes the salient features of the World Business Environment Survey (WBES). It shows that important dimensions for the climate of business operation and investment can be measured, analyzed, and compared across countries, and that governance is key to the business environment and investment climate. The survey findings suggest that key policy, institutional and governance indicators affect the growth of a firm’s sale and investment and the extent to which firms operate in the unofficial economy. Further, the paper provides empirical support for some commonly held notions, while challenging others. It suggests a link between taxation, financing, and corruption on the one hand, and growth and investment on the other, and it highlights the costs to economies where the state is captured by a narrow set of private interests.
Corruption is one of the key problems facing the Russian state as it seeks to evolve out of its socialist past. Naturally, regional patterns of corruption exist across a country as large and diverse as the Russian Federation. To explain these variations, we analyze 2002 data from Transparency International and the Information for Democracy Foundation that provides the first effort to measure differences in incidence of corruption across 40 Russian regions. We find that corruption in Russia primarily is a structural problem, and not one related to its institutions. Within each region, the amount of corruption increases as the size of the regional economy grows, the per capita income decreases, and the population decreases. Russian policymakers can therefore work to reduce corruption by encouraging economic development outside of the key centers of Moscow and St. Petersburg. Because the data show that voter turnout also lowers corruption, policymakers can also fight corruption by fostering more political accountability in elections.
This paper examines the relationship between the legal system and banking development and traces this connection through to long-run rates of per capita GDP growth, capital stock growth, and productivity growth. The data indicate that countries where the legal system (1) emphasizes creditor rights and (2) rigorously enforces contracts have better developed banks than countries where laws do not give a high priority to creditors and where enforcement is lax. Furthermore, the exogenous component of banking development--the component defined by the legal environment--is positively and robustly associated with per capita growth, physical capital accumulation, and productivity growth.
We study how foreign bank penetration affects financial sector development in poor countries. A theoretical model shows that when foreign banks are better at monitoring highend customers than domestic banks, their entry benefits those customers but may hurt other customers and worsen welfare. The model also predicts that credit to the private sector should be lower in countries with more foreign bank penetration. In the empirical section, we show that, in poor countries, a stronger foreign bank presence is robustly associated with less credit to the private sector both in cross-sectional and panel tests. In addition, in countries with more foreign bank penetration, credit growth is slower and there is less access to credit. We find no adverse effects of foreign bank presence in more advanced countries.
Recent studies argue that the spread-adjusted Taylor rule (STR), which includes a response to the credit spread, replicates monetary policy in the United State. We show (1) STR is a theoretically optimal monetary policy under heterogeneous loan interest rate contracts in both discretionay and commitment monetary policies, (2) however, the optimal response to the credit spread is ambiguous given the financial market structure in theoretically derived STR, and (3) there, a commitment policy is effective in narrowing the credit spread when the central bank hits the zero lower bound constraint of the policy rate.
In this paper, we assess whether recent economic developments in Russia are symptomatic of Dutch Disease. We first provide a brief review of the literature on Dutch Disease and the natural resource curse. We then discuss the symptoms of Dutch Disease, which include (1) real exchange rate appreciation; (2) slower manufacturing growth; (3) faster service sector growth; and (4) higher overall wages. We test these predictions for Russia while carefully controlling for other factors that could have led to similar symptoms. We con-clude that, while Russia has all of the symptoms, the diagnosis of Dutch Disease remains to be confirmed.
This paper applies an analytical paradigm of institutional economics to the transition of the Russian banking sector, focusing on the interplay between ownership change and institutional change. We find that the state’s withdrawal from commercial banking has been inconsistent and limited in scope. To this day, core banks have yet to be privatized and the state has made a comeback as owner of the dominant market participants. We also look at the new institutions imported into Russia to regulate banking and finance, including rule of law, competition, deposit insurance, bankruptcy, and corporate governance. The unfortunate combination of this new institutional overlay and traditional local norms of behavior have brought Russia to an impasse – the banking sector’s ownership structure hinders further advancement of market institutions. Indeed, we may now be witnessing is a retreat from the original market.
In this paper we start with a discussion of some of the different denotations of the problem of corruption. We then consider the ways in which the damaging consequences of corruption operate in a developing economy, while not ignoring its possible redeeming features in some cases. We pursue the question of why corruption is perceptibly so different in different societies and also persistent. Finally, we examine the feasible policy issues that arise in this context.
This study analyses the interest margin in the principal European banking sectors (Germany, France, the United Kingdom, Italy and Spain) in the period 1993–2000 using a panel of 15,888 observations, identifying the fundamental elements affecting this margin. Our starting point is the methodology developed in the original study by Ho and Saunders [Journal of Financial and Quantitative Analysis XVI (1981) 581–600] and later extensions, but widened to take banks' operating costs explicitly into account. Also, unlike the usual practice in the literature, a direct measure of the degree of competition (Lerner index) in the different markets is used. The results show that the fall of margins in the European banking system is compatible with a relaxation of the competitive conditions (increase in market power and concentration), as this effect has been counteracted by a reduction of interest rate risk, credit risk, and operating costs.
Several European countries, facing a sizeable underground economy, often adopt underground reducing policies mainly based on incentives in the tax-benefit system. Since empirical evidence manifests a substantial failure of such policies, we construct a simple model to indicate the crucial aspects of this failure. To this end we consider a tax-evading firm, allocating work in the official and underground sector, where it is not taxed. With a view to reducing underground employment, the government may decide to launch an amnesty for past social security non-compliance, while providing fiscal incentives for new hiring in order to encourage a process of worker regularization. Allowing for endogenous enforcement, we find that the reputation of policy-makers in combating tax evasion proves crucial in determining the success of such a policy. Copyright 2009 Blackwell Publishing Ltd.
Recent studies argue that the spread-adjusted Taylor rule (STR), which includes a response to the credit spread, replicates monetary policy in the United State. We show (1) STR is a theoretically optimal monetary policy under heterogeneous loan interest rate contracts in both discretionay and commitment monetary policies, (2) however, the optimal response to the credit spread is ambiguous given the financial market structure in theoretically derived STR, and (3) there, a commitment policy is effective in narrowing the credit spread when the central bank hits the zero lower bound constraint of the policy rate.
We investigate cross-country determinants of private credit, using new data on legal creditor rights and private and public credit registries in 129 countries. We find that both creditor protection through the legal system and information sharing institutions are associated with higher ratios of private credit to GDP, but that the former is relatively more important in the richer countries. An analysis of legal reforms also shows that improvements in creditor rights and in information sharing precede faster credit growth. We also find that creditor rights are extremely stable over time, contrary to the convergence hypothesis. Finally, we find that legal origins are an important determinant of both creditor rights and information sharing institutions.
Legal and institutional differences shape the ownership and terms of bank loans across the world. We show that under strong creditor protection, loans have more concentrated ownership, longer maturities, and lower interest rates. Moreover, the impact of creditor rights on loans depends on borrower characteristics such as the size and tangibility of assets. Foreign banks appear especially sensitive to the legal and institutional environment, with their ownership declining relative to domestic banks as creditor protection falls. Our multidimensional empirical model paints a more complete picture of how financial contracts respond to the legal and institutional environment than existing studies. Copyright 2007 by The American Finance Association.
Corruption in Russia: is bribery always wrong? Gallup Poll News Service
- S Gradirovski
- N Esipova
Gradirovski, S., Esipova, N., 2006. Corruption in Russia: is bribery always wrong? Gallup Poll News Service, November 15.
Institutions and bank behavior. NYU Stern Economics Working Paper 06-16
- R Haselmann
- P Wachtel
Haselmann, R., Wachtel, P., 2006. Institutions and bank behavior. NYU Stern Economics Working Paper 06-16, New York. INDEM, 2005. Corruption Process in Russia: Level, Structure, Trends. Diagnostics of Corruption in Russia. INDEM Foundation, Moscow.
Corruption Process in Russia: Level, Structure, Trends. Diagnostics of Corruption in Russia
INDEM, 2005. " Corruption Process in Russia: Level, Structure, Trends. Diagnostics of
Corruption in Russia, " INDEM Foundation, Moscow.
Transition Report 2006: Finance in Transition, European Bank for Reconstruction and Development
EBRD, 2006. Transition Report 2006: Finance in Transition, European Bank for Reconstruction and Development, London.
The Methods Applied to Implement the Project 'Indices of Corruption in Russia's Regions
Transparency International and INDEM, 2002. " The Methods Applied to Implement the
Project 'Indices of Corruption in Russia's Regions', " Moscow.