Collectivism and connected lending

Siwapong Dheera-aumpon

Research in International Business and Finance, 2019, vol. 48, issue C, 258-270

Abstract: National culture may affect the prevalence of connected lending. This study aims to assess the effects of national culture, especially collectivism, on the need for special connections with banks, which is a measure of connected lending. Using data covering more than 4000 firms in 40 countries, this study finds that institutional collectivism decreases the need for special connections, while in-group collectivism does not. This indicates that institutional collectivism is linked to lending cronyism while in-group collectivism is not. The results also suggest that the need for special connections with banks is not identical to the corruption of bank officials. They are separate notions and should not be treated as a proxy for each other.

Keywords: Collectivism; Financial institution; Firm financing; Institutional environment; National culture (search for similar items in EconPapers)
JEL-codes: G21 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Working Paper: Collectivism and Connected Lending (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:48:y:2019:i:c:p:258-270

DOI: 10.1016/j.ribaf.2019.01.005

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