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ABSTRACT 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… Click to show full abstract
ABSTRACT 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.
Journal Title: Macroeconomics and Finance in Emerging Market Economies
Year Published: 2020
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