Institutions and Bank Behavior

Wachtel, Paul L.; Haselmann, Rainer

doi:10.2139/ssrn.950265

Cited by 14 publications

(6 citation statements)

References 13 publications

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“…Therefore, this effect is expected to play a greater role for borrowers when the degree of information asymmetries is higher from the bank's perspective. As observed by Haselmann and Wachtel (2006), these asymmetries should be weaker when banks lend money to government entities than to other borrowers as the ability of the government to tax means a lower default risk, which, in turn, leads to lower requirements for the bank to gather information. Thus, we expect a weaker detrimental effect of corruption on bank lending to government entities.…”

Section: V3 Estimations By Category Of Loansmentioning

confidence: 97%

How corruption affects bank lending in Russia

Weill

2011

Economic Systems

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The aim of this study is to investigate the impact of corruption on bank lending in Russia. This issue is of major interest in order to understand the causes of financial underdevelopment and the effects of corruption in Russia. We use regional measures of corruption and bank-level data to perform this investigation. Our main estimations show that corruption hampers bank lending in Russia. We investigate whether this negative role of corruption is influenced by the degree of bank risk aversion, but find no effect. The detrimental effect of corruption is only observed for loans to households and firms, in opposition to loans to government. Additional controls confirm the detrimental impact of corruption on bank lending. Therefore, our results provide motivations to fight corruption to favor bank lending in Russia.

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Section: V3 Estimations By Category Of Loansmentioning

confidence: 97%

How corruption affects bank lending in Russia

Weill

2011

Economic Systems

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“…Most of these family businesses are highly successful ( The Economist , 1996) and they cannot be judged by the transactional lending practices. Marisetty et al ’s (2008) study finds that, in case of family business, the successor becomes the owner of the business, and the performance of the company depends on this family relationship. Hence, along with transaction lending, relationship lending should be considered in the framework for MSME financing for markets like India.…”

Section: Literature Reviewmentioning

confidence: 99%

Scope for alternative avenues to promote financial access to MSMEs in developing nation evidence from India

Maiti

2018

IJLMA

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Purpose The purpose of this study is to highlight the key challenges and opportunities that lie with some of the alternative avenues/tools to promote financial access to MSME in India. Design/methodology/approach Initially, the study discusses the scope of various alternative avenues/tools for MSME financing along with traditional bank SME credits, highlighting some of the factors that will boost the high performance and growth of MSME in future. Findings There is a dominance of domestic banks in the MSME financing over cross-border banks in India. The study finds several opportunities lie in the MSME financing for the banks and other alternative avenues/tools: friendly government policies and improving the legal system make the business environment suitable for MSME financing business. There are several obstacles like discrete presence of clients, high operating cost and low profitability, lack of proper risk management and low literacy rate that make MSME financing difficult for the SME finance business. Active government initiatives and other supporting factors will act as the game changer and promoter for the banks and other alternative avenues/tools for MSME financing. Originality/value The paper is original and brings out some valuable findings that will help the SME business clients to choose alternative access to finance.

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“…An important part of literature has confirmed that bank lending activities are influenced by the institutional landscape (Haselmann & Wachtel, 2006; Lepetit, Nys, Rous, & Tarazi, 2008). With bad institutional quality, and generally marked by government instability, high levels of corruption and weak legal protection of creditors, the level of NPLs increases and banks are highly exposed to default risk (Lambsdorff & Teksoz, 2004).…”

Section: Introductionmentioning

confidence: 99%

Is the relationship between corruption, government stability and non‐performing loans non‐linear? A threshold analysis for theMENAregion

2020

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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.

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Institutions and Bank Behavior

Cited by 14 publications

References 13 publications

How corruption affects bank lending in Russia

How corruption affects bank lending in Russia

Scope for alternative avenues to promote financial access to MSMEs in developing nation evidence from India

Is the relationship between corruption, government stability and non‐performing loans non‐linear? A threshold analysis for theMENAregion

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