TY - JOUR
T1 - Credit information sharing and loan default in developing countries
T2 - the moderating effect of banking market concentration and national governance quality
AU - Fosu, Samuel
AU - Danso, Albert
AU - Agyei-Boapeah, Henry
AU - Ntim, Collins G.
AU - Adegbite, Emmanuel
N1 - Funding Information:
We thank Cheng-Few Lee (the Editor) and two anonymous referees for their invaluable comments. Samuel Fosu acknowledges, without implication, funding by the UK Economic and Social Research Council (ESRC) and the UK Department for International Development (DFID) under a research Grant, ESRC Reference: ES/N013344/2, on ‘Delivering inclusive financial development and growth’.
Publisher Copyright:
© 2019, Springer Science+Business Media, LLC, part of Springer Nature.
PY - 2020/7/1
Y1 - 2020/7/1
N2 - 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.
AB - 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.
KW - Banking market concentration
KW - Credit information sharing
KW - Developing countries
KW - Governance quality
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U2 - 10.1007/s11156-019-00836-1
DO - 10.1007/s11156-019-00836-1
M3 - Article
AN - SCOPUS:85070341441
SN - 0924-865X
VL - 55
SP - 55
EP - 103
JO - Review of Quantitative Finance and Accounting
JF - Review of Quantitative Finance and Accounting
IS - 1
ER -