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, 2019

56 Pages Posted: 23 Jan 2020

See all articles by Samuel Fosu

Samuel Fosu

De Montfort University; University of Birmingham - Birmingham Business School

Albert Danso

Leicester Castle Business School

Henry Agyei-Boapeah

University of York - The York Management School

Collins G. Ntim

University of Southampton Business School, UK; University of Southampton

Emmanuel Adegbite

University of Nottingham

Date Written: 2019

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.

Keywords: Credit information sharing, Developing countries, Banking market concentration, Governance quality

JEL Classification: G14, G21, G38

Suggested Citation

Fosu, Samuel and Danso, Albert and Agyei-Boapeah, Henry and Ntim, Collins G. and Adegbite, Emmanuel, Credit Information Sharing and Loan Default in Developing Countries: The Moderating Effect of Banking Market Concentration and National Governance Quality (2019). Review of Quantitative Finance and Accounting, 2019. Available at SSRN: https://ssrn.com/abstract=2532406 or http://dx.doi.org/10.2139/ssrn.2532406

Samuel Fosu

De Montfort University ( email )

Leicester, LE1 9BH
United Kingdom

University of Birmingham - Birmingham Business School ( email )

Edgbaston Park Road
Birmingham, B15 2TY
United Kingdom

Albert Danso

Leicester Castle Business School

The Gateway
Leicester, LE1 9BH
United Kingdom

Henry Agyei-Boapeah

University of York - The York Management School

Sally Baldwin Buildings
Heslington
York, North Yorkshire YO10 5DD
United Kingdom

Collins G. Ntim

University of Southampton Business School, UK ( email )

Southampton Business School
Highfield
Southampton, England SO17 IBJ
United Kingdom
+44 (0) 238059 4285 (Phone)
+44 (0) 238059 3844 (Fax)

HOME PAGE: http://www.southampton.ac.uk/business-school/about/staff/cgn1n11.page

University of Southampton ( email )

Southampton, SO17 1BJ
United Kingdom

Emmanuel Adegbite (Contact Author)

University of Nottingham ( email )

University Park
Nottingham, NG8 1BB
United Kingdom

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
11
Abstract Views
119
PlumX Metrics