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

Credit information sharing and loan default in developing countries: the moderating effect of banking market concentration and national governance quality
Credit information sharing and loan default in developing countries: the moderating effect of banking market concentration and national governance quality
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.
Credit information sharing, Developing countries, Banking market concentration, Governance quality
0924-865X
55–103
Fosu, Samuel
20135acd-447a-44ab-b5c7-949477e89121
Danso, Albert
a78c616e-5975-49b3-825c-f3f6b617b02b
Agyei-Boapeah, Henry
37005f29-d453-458e-b6b5-cd92e55587a4
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Adegbite, Emmanuel
d45e25d6-f546-43a3-b8cb-e9b414288bc6
Fosu, Samuel
20135acd-447a-44ab-b5c7-949477e89121
Danso, Albert
a78c616e-5975-49b3-825c-f3f6b617b02b
Agyei-Boapeah, Henry
37005f29-d453-458e-b6b5-cd92e55587a4
Ntim, Collins
1f344edc-8005-4e96-8972-d56c4dade46b
Adegbite, Emmanuel
d45e25d6-f546-43a3-b8cb-e9b414288bc6

Fosu, Samuel, Danso, Albert, Agyei-Boapeah, Henry, Ntim, Collins 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 (1), 55–103. (doi:10.1007/s11156-019-00836-1).

Record type: Article

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.

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Accepted Manuscript Credit information 2 August 2019 - Accepted Manuscript
Available under License Creative Commons Attribution.
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More information

Accepted/In Press date: 2 August 2019
e-pub ahead of print date: 9 August 2019
Published date: July 2020
Keywords: Credit information sharing, Developing countries, Banking market concentration, Governance quality

Identifiers

Local EPrints ID: 433244
URI: http://eprints.soton.ac.uk/id/eprint/433244
ISSN: 0924-865X
PURE UUID: 809f1c08-7ad4-48e8-9678-43e37d3203f2
ORCID for Henry Agyei-Boapeah: ORCID iD orcid.org/0000-0003-4798-6324
ORCID for Collins Ntim: ORCID iD orcid.org/0000-0002-1042-4056

Catalogue record

Date deposited: 12 Aug 2019 16:30
Last modified: 26 Nov 2021 06:52

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Contributors

Author: Samuel Fosu
Author: Albert Danso
Author: Henry Agyei-Boapeah ORCID iD
Author: Collins Ntim ORCID iD
Author: Emmanuel Adegbite

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