CORRUPTION AND BANKS’ NON-PERFORMING LOANS: Empirical Evidence from Mena Countries

Amer Mohamad () and Hatice Jenkins ()
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Amer Mohamad: Department of Banking and Finance, Eastern Mediterranean University, Famagusta, Northern Cyprus via Mersin 10, Turkey
Hatice Jenkins: Department of Banking and Finance, Eastern Mediterranean University, Famagusta, Northern Cyprus via Mersin 10, Turkey

No 2020-25, Development Discussion Papers from JDI Executive Programs

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.

Keywords: MENA; non-performing; loans; transparency; International; corruption; banks (search for similar items in EconPapers)
JEL-codes: C23 G21 O53 (search for similar items in EconPapers)
Pages: 15 Pages
Date: 2025-01-29
New Economics Papers: this item is included in nep-ara
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