Religiosity and corruption in bank lending

Niu, Geng; Zhou, Yang; Lu, Weijie; Gan, Hongwu

doi:10.1111/jbfa.12594

Cited by 7 publications

(2 citation statements)

References 85 publications

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“…LLP represents the ratio of non-performing loans (Hsieh and Lee 2020). SIZE represents the log of total assets of the bank (Hu and Gong 2019;Niu et al 2020). DPG represents the deposit growth ratio.…”

Section: Empirical Frameworkmentioning

confidence: 99%

Nexus between Regulatory Sandbox and Performance of Digital Banks—A Study on UK Digital Banks

Washington

Rehman

Lee

2022

JRFM

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It is debatable whether the regulatory Sandbox contributes to financial institutions’ growth. We used a panel sample of 24 challenger banks from the UK. This study has reviewed digital banks’ adoption of a regulatory sandbox to foster innovation in financial sectors. We assessed the regulatory tools that encourage FinTech innovations, focusing on the aims of financial stability. Therefore, we exploit the introduction of the Sandbox as a catalyst for digital banking and its heterogeneous effects on the financial performance of digital banks. Our research showed that regulatory sandboxes have a detrimental impact on the financial performance of digital banks, increasing compliance costs and efficiency costs. This study will contribute to the limited literature on regulatory Sandbox and its policy implication for the growth and performance of digital banks. The recommendation of this study would help to improve the regulation of the development of digital technologies in the UK.

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Section: Empirical Frameworkmentioning

confidence: 99%

Nexus between Regulatory Sandbox and Performance of Digital Banks—A Study on UK Digital Banks

Washington

Rehman

Lee

2022

JRFM

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“…Theoretically, a rational government official will choose to be corrupt, if the benefits of corruption exceed the costs, where the costs is estimated as the probability of being caught times the penalty for being caught (Klitgaard, 1988). Hence, local political corruption level is affected by factors related to the benefits of corruption (e.g., local government revenue, number of regulations that can be subverted), local people's ability and incentive to monitor (e.g., the strength of local Freedom of Information Act, local media coverage of politics, local education level, local religiosity, local wealth level, local voter preference heterogeneity) and government official accountability (e.g., the appointive power of state governor, voter turnout in elections, government decentralization level) (Meier and Holbrook, 1992;Fisman and Gatti, 2002;Glaeser and Saks, 2006;Campante and Do, 2014;Cordis and Warren, 2014;Niu et al, 2022). Given that most of these factors are long-lasting, we think that corruption is likely to be long-lasting and therefore, firms may want to take actions to create a long-term sustainable wedge between the reported numbers and the actual numbers.…”

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confidence: 99%

Political corruption and accounting choices

Zhang

2022

Business Fin & Account

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We examine how political corruption affects firms’ accounting choices. We hypothesize and find that firms headquartered in corrupt districts manipulate earnings downwards, relative to firms headquartered elsewhere. Our finding is robust to alternative corruption measures, alternative discretionary accrual measures, alternative model specifications, the instrumental variable approach and difference‐in‐differences analyses based on firm relocation and high profile cases. We find that firms headquartered in corrupt districts prefer income‐decreasing accounting choices and exhibit higher conservatism. Finally, we find that the effect of corruption on earnings management is more pronounced for geographically concentrated firms, for firms without political connections, for firms in politically sensitive industries, for firms with lower transient institutional investor ownership and for firms with less analyst coverage. In sum, our findings suggest that firms respond to corruption by lowering their accounting earnings.

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Corruption in Bank Lending: The Role of Culturally Endorsed Leadership Prototypes

Gaganis,

Pasiouras,

Tasiou

2023

J Bus Ethics

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This paper examines the impact of three culturally endorsed leadership prototypes on bank lending corruption. We bring together studies that approach the corruption of bank lending officers from the perspective of a principal-agent problem and studies from the leadership literature, suggesting leadership as an alternative to contractual solutions to agency problems. We hypothesize, based on these views, that culturally endorsed leadership styles that improve (worsen) the leader-subordinate relationships have a negative (positive) effect on bank lending corruption. Using a sample of around 3,500 firms from 36 countries, we find that the prosocial leadership prototype and the nonautonomous leadership prototype do not matter, whereas the self-serving leadership prototype has a positive and statistically significant effect on bank lending corruption. These findings are robust to the inclusion of various control variables in the regressions, and alternative estimation approaches, including ones that account for endogeneity concerns. Furthermore, we find that the power of bank regulators and the age of the credit information sharing mechanism play a moderating role in the relationship between the self-serving leadership prototype and bank lending corruption.

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Religiosity and corruption in bank lending

Cited by 7 publications

References 85 publications

Nexus between Regulatory Sandbox and Performance of Digital Banks—A Study on UK Digital Banks

Nexus between Regulatory Sandbox and Performance of Digital Banks—A Study on UK Digital Banks

Political corruption and accounting choices

Corruption in Bank Lending: The Role of Culturally Endorsed Leadership Prototypes

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