Corruption and banks’ non-performing loans: empirical evidence from MENA countries

Amer Mohamad and Hatice Jenkins

Macroeconomics and Finance in Emerging Market Economies, 2021, vol. 14, issue 3, 308-321

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.

Date: 2021
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DOI: 10.1080/17520843.2020.1842478

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