Corruption and Financial Development : Evidence from Eastern Europe and Central Asia Countries

Abstract

Studying the relation between corruption perception 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 perception and financial development.

Economic Growth, Corruption, and Financial Development: Evidence from Ukraine

“…The shortrun link between the variable of the study indicates ha the financial development of Ukraine during the period of study is strongly decline by 16.39 % if corruption increases 1% in long run as well as in long run. The results of this study are comparable with the similar findings of Adams and Klobodu (2016); Batabyal and Chowdhury (2015); Ekşi and Doğan (2020); Goto and Ogunnubi (2014); Muhammad and Fakunle (2019); Wang (2016); Yudhvir and Sunita (2012). However, the results of the present research investigation were not comparable with the positive link between the variable from the studies (Ekşi & Doğan, 2020;Saied & Awad-Allah, 2020;Song et al, 2021).…”

“…The results of this study are comparable with the similar findings of Adams and Klobodu (2016); Batabyal and Chowdhury (2015); Ekşi and Doğan (2020); Goto and Ogunnubi (2014); Muhammad and Fakunle (2019); Wang (2016); Yudhvir and Sunita (2012). However, the results of the present research investigation were not comparable with the positive link between the variable from the studies (Ekşi & Doğan, 2020;Saied & Awad-Allah, 2020;Song et al, 2021). It is inferred from the evidence of this study the corruption contributes negatively to explaining the financial development of Ukraine during the period of study for the long run, as well as in the short run.…”

“…The significance of economic growth in the link of financial development with corruption can indeed be explained in part by the criterion effect (Muhammad & Fakunle, 2019). Corruption doesn't somehow stifle economic progress; on the alternative, it encourages the expansion of the economy as a whole (Ekşi & Doğan, 2020). However, Corruption promotes economic combined growth as well as acts as "greases" mostly in development engines Hung Son, Gia Khanh, and Thanh Liem (2020b).…”

Exchange rate volatility, corruption, and economic growth

“…Thus, while the median fdi in high-corruption countries barely increased from 0.16 to 0.19 between the decades of 2000 and 2010, in low-corruption countries it went from 0.35 to 0.50 and even reduced its dispersion. Even though some authors conclude that there is no relationship between corruption and financial development ( Ekşi̇ and Doğan-Başar, 2020 ), other studies find that further development of the financial system is a key factor in controlling corruption ( Chandan and Paramati, 2020 ), which in turn depends on government transparency ( Zhang et al., 2021 ). This occurs mainly because the higher the financial development, the greater the competition in this market, with the participation of private and foreign entities, and even the emergence of new ones.…”

Financial intermediation, inclusion, Fintech, and income inequality in Africa: Robust evidence from the supply and demand side data

“…The destructive impact of corruption (Adefeso, 2018), is associated with higher firm borrowing costs, lower stock valuation, worse corporate governance, bank stability, and risk for bank lending (Ben Ali et al, 2020; Ng, 2006; Wei & Kong, 2017). Controlling corruption and its interaction with financial development significantly reduces income inequality (Adams & Klobodu, 2016; Ekşi & Doğan, 2020). The fight to control corruption and interaction with domestic credit exhibit an inverted u‐shape relationship with income inequality (Adeleye et al, 2017).…”