Does money buy credit? Firm-level evidence on bribery and bank debt

Fungáčová, Zuzana, Kochanova, Anna ORCID: https://orcid.org/0000-0003-3531-7561 and Weill, Laurent 2015. Does money buy credit? Firm-level evidence on bribery and bank debt. World Development 68 , pp. 308-322. 10.1016/j.worlddev.2014.12.009

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Abstract

We combine information on bribery practices with firm-level accounting data to examine how bribery influences bank debt ratios for a large sample of firms in 14 transition countries. We find that bribery is positively related to firms’ total bank debt ratios, which provides evidence that bribing bank officials facilitates firms’ access to bank loans. This impact varies with the maturity of the bank debt, as bribery contributes to higher short-term bank debt ratios but lower long-term bank debt ratios. Finally, we find that the institutional characteristics of the banking industry influence the relation between bribery and firms’ bank debt ratios.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Elsevier
ISSN:	0305-750X
Date of First Compliant Deposit:	22 November 2017
Date of Acceptance:	14 December 2014
Last Modified:	03 Nov 2022 10:06
URI:	https://orca.cardiff.ac.uk/id/eprint/106917

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