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

Fosu, Samuel, Danso, Albert, Agyei-Boapeah, Henry, Ntim, Collins G., and Adegbite, Emmanuel (2020) Credit information sharing and loan default in developing countries: the moderating effect of banking market concentration and national governance quality. Review of Quantitative Finance and Accounting, 55. pp. 55-103.

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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 nine-year period (i.e., over 6,300 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.

Item ID: 61275
Item Type: Article (Research - C1)
ISSN: 1573-7179
Keywords: credit information sharing, developing countries, banking market concentration, governance quality
Copyright Information: © Springer Science+Business Media, LLC, part of Springer Nature 2019.
Funders: UK Economic and Social Research Council, UK Department for International Development (DFID)
Projects and Grants: DFID ESRC Reference: ES/N013344/2
Date Deposited: 23 Feb 2020 20:29
FoR Codes: 15 COMMERCE, MANAGEMENT, TOURISM AND SERVICES > 1502 Banking, Finance and Investment > 150201 Finance @ 100%
SEO Codes: 90 COMMERCIAL SERVICES AND TOURISM > 9001 Financial Services > 900101 Finance Services @ 100%
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