Corruption, Gender and Credit Constraints: Evidence from South Asian SMEs

Nirosha Wellalage (), Stuart Locke () and Helen Samujh ()
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Stuart Locke: The University of Waikato
Helen Samujh: The University of Waikato

Journal of Business Ethics, 2019, vol. 159, issue 1, No 17, 267-280

Abstract: Abstract This paper provides analyses of the effect of corruption in South Asia on (1) credit access for small- and medium-size enterprises (SMEs), and (2) credit constraints faced by female-owned and male-owned SMEs. By addressing potential endogeneity and reverse causality of corruption and credit constraints via instrumental variables, this study reports that corruption has a detrimental effect on credit access. Specifically, corruption increases the probability of SMEs credit constraints by 7.63%. However, gender differences emerge, indicating that bribery is slightly more effective when used by female SME owners. When male-owned SMEs pay bribes, they are on average 0.61% more credit-constrained than their counterparts. For female-owned SMEs paying bribes, they are on average 0.78% more likely to be less credit-constrained compared to female SME owners who do not pay bribes. Overall, bribery is not very effective in achieving the desired outcome and attitudes towards bribery as unethical may be more a question of culture than of gender.

Keywords: Gender; Corruption; Bribes; SME; Credit access; South Asia (search for similar items in EconPapers)
JEL-codes: D73 E5 G21 L25 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (34)

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DOI: 10.1007/s10551-018-3793-6

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