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Bribes, market power and access to credit: evidence from cross-country firm-level data

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  • Le Thanh Ha

    (National Economics University)

  • Dao Hanh Le

    (National Economics University)

  • Nguyen Ngoc Mai

    (National Economics University)

Abstract

This paper used multi-country firm-level data covering 104 countries for the period from 2010 to 2019 to investigate the effects of bribery on credit access for firms holding bargaining power and/or facing market competition. We used firms’ size and legal status to capture their bargaining power, while the levels of market competition were analyzed according to the number of competitors in the same working field. Our empirical results provided evidence to support the “greasing-the-wheels-of-credit access” hypothesis. Furthermore, the effects of bribery become stronger for larger-sized or formally registered firms, and those facing no market competition. These effects also become pronounced if we controlled the endogeneity problem.

Suggested Citation

  • Le Thanh Ha & Dao Hanh Le & Nguyen Ngoc Mai, 2021. "Bribes, market power and access to credit: evidence from cross-country firm-level data," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 68(4), pages 527-550, December.
    • Handle: RePEc:spr:inrvec:v:68:y:2021:i:4:d:10.1007_s12232-021-00381-1
    DOI: 10.1007/s12232-021-00381-1
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    More about this item

    Keywords

    Bribery; Credit access; Bargaining power; Market competition;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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