Corruption, nonperforming loans, and economic growth: International evidence

Son, Tran Hung; Liêm, Nguyễn Thanh; Khương, Nguyễn Vĩnh

doi:10.1080/23311975.2020.1735691

Cited by 40 publications

(22 citation statements)

References 37 publications

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“…The result pointed out that a higher corruption level relates to more bad loans. Similarly, the increase of non-performing bank loans is affected by corruption, and overall, corrupt practices undermine the soundness level of banks (Detragiache et al, 2008;Park, 2012;Son et al, 2020;Weill, 2011). In addition, those findings argued that declining economic growth can be influenced by the poor quality of bank loans through corruption.…”

Section: Corruption and Bank Soundnessmentioning

confidence: 98%

Does corruption affect Islamic banking? Empirical evidence from the OIC countries

Yunan

2020

JFC

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Purpose This paper aims to examine whether the level of corruption affects profitability and soundness of Islamic banking. Design/methodology/approach This paper uses a dynamic panel of 61 Islamic banks from 12 Organization of Islamic Cooperation (OIC) countries covering the period between 2016 and 2018. Findings This paper finds that the empirical evidence examined shows that corruption does affect the profitability and soundness of Islamic banks. Originality/value The value of this paper is to emphasize further understanding of corruption behaviour on Islamic banking in Islamic countries. This paper contributes to filling the gaps in the current literature on corruption and Islamic banking. Existing literature has only focussed on either profitability or soundness of Islamic banking, whereas this paper analyses the impact of corruption levels for both performance measurements simultaneously.

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Section: Corruption and Bank Soundnessmentioning

confidence: 98%

Does corruption affect Islamic banking? Empirical evidence from the OIC countries

Yunan

2020

JFC

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“…;Mehreen, Marimuthu, Karim, & Jan, 2020;Mooneeram-Chadee, 2020;Samail, Zaidi, Mohamed, & Kamaruzaman, 2018;Son, Liem, & Khuong, 2020).H :There are differences in the return on asset of Islamic and conventional banking3a H :There are differences in the return on equity of Islamic and conventional banking 3b H :There are differences in the operating expense to operating income of Islamic and 3c conventional banking Islamic banking in Indonesia has shown a positive trend, and needs a strong foundation…”

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confidence: 99%

A Comparative Study on Financial Performance between Islamic and Conventional Banking in Indonesia During the COVID-19 Pandemic

et al. 2022

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The COVID-19 pandemic has had an impact on all aspects of life, including Indonesian banking. Furthermore, there has been a rapid growth of both Islamic and conventional banking industries. Therefore, this study aims to analyze the diﬀerences in the ﬁnancial ratios of capital adequacy ratio, non-performing loans/non-performing ﬁnancing, return on asset, return on equity, operating expense to operating income, as well as loan to deposit ratio/ﬁnancing todeposit ratio of Islamic and conventional banking during the COVID-19 pandemic. Acomparative analysis method was used with a quantitative approach, and data analysis was carried out using the independent sample t-test and the Mann-Whitney rank test. The results showed that during the COVID-19 pandemic, there were signiﬁcant diﬀerences in the ﬁnancial performance ratios of capital adequacy ratio, non-performing loans/non-performing ﬁnancing, return on asset, return on equity, operating expense to operating income, and loan to deposit ratio/ﬁnancing to deposit ratio for both Islamic and conventional banking. Moreover, conventional banking tends to have better ﬁnancial performance compared to Islamic bankingduring the COVID-19 pandemic. The implication of this study is that the public can ﬁnd out the ﬁnancial position of both Islamic and conventional banks and make comparisons to ascertain which one has a better ﬁnancial position in times of crisis.

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“…The first is relative to the greater availability of resources to evaluate and monitor borrowing customers and, with this, to mitigate risk exposure. The other route is relative to a greater risk assumption, because they understand that they are too big to fail (Albaity et al 2019;Feghali et al 2021;Jenkins et al 2021;Son et al 2020).…”

Section: Data Descriptionmentioning

confidence: 99%

The Effect of Financial Inclusion and Competitiveness on Financial Stability: Why Financial Regulation Matters in Developing Countries?

Jungo

Madaleno

Botelho

2022

JRFM

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This study aims to assess the effect of financial inclusion and competitiveness on banks’ financial stability, considering the moderating role of financial regulation. To do so, we compare the effects of these variables in Sub-Saharan African (SSA) and Latin American and Caribbean (LAC) countries. Our results suggest that inclusion enhances bank stability in SSA and LAC countries, and financial regulation contributes to increasing financial stability in LAC countries, while we find no statistical significance in the effect of financial regulation on financial stability in SSA countries. Moreover, competitiveness negatively impacts financial stability, and financial regulation moderates the negative effect of competitiveness on financial stability in SSA and LAC countries. We also find that financial inclusion reduces credit risk in SSA countries, and for LAC countries financial inclusion increases credit risk and reduces bank profitability. Regarding the practical implications, this study shows that fostering financial inclusion in the countries under study contributes significantly to improving the welfare of households and especially to the stability of the financial system. The present study allows expanding of the scarce literature by examining the effect of financial inclusion and market structure on financial stability in two different samples, consisting of 41 countries in the SSA region and 31 countries in the LAC region, throughout 2005–2018.

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Corruption, nonperforming loans, and economic growth: International evidence

Cited by 40 publications

References 37 publications

Does corruption affect Islamic banking? Empirical evidence from the OIC countries

Does corruption affect Islamic banking? Empirical evidence from the OIC countries

A Comparative Study on Financial Performance between Islamic and Conventional Banking in Indonesia During the COVID-19 Pandemic

The Effect of Financial Inclusion and Competitiveness on Financial Stability: Why Financial Regulation Matters in Developing Countries?

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