Credit information sharing and loan default in developing countries: the moderating effect of banking market concentration and national governance quality

Samuel Fosu (), Albert Danso, Henry Agyei-Boapeah, Collins Ntim and Emmanuel Adegbite
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Samuel Fosu: De Montfort University
Albert Danso: De Montfort University
Henry Agyei-Boapeah: University of York Management School
Emmanuel Adegbite: Nottingham University Business School

Review of Quantitative Finance and Accounting, 2020, vol. 55, issue 1, No 3, 55-103

Abstract: Abstract Departing from the existing literature, which associates credit information sharing with improved access to credit in advanced economies, we examine whether credit information sharing can also reduce loan default rate for banks domiciled in developing countries. Using a large dataset covering 879 unique banks from 87 developing countries from every continent, over a 9-year period (i.e., over 6300 observations), we uncover three new findings. First, we find that credit information sharing reduces loan default rate. Second, we show that the relationship between credit information sharing and loan default rate is conditional on banking market concentration. Third, our findings suggest that governance quality at the country level does not have a strong moderating role on the effect of credit information sharing on loan default rate.

Keywords: Credit information sharing; Developing countries; Banking market concentration; Governance quality (search for similar items in EconPapers)
JEL-codes: G14 G21 G38 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (7)

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DOI: 10.1007/s11156-019-00836-1

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