Corruption has a complex relationship with economic growth. We have explored the impact of corruption on credit risk from a global perspective. The sample consists of 178 countries and covers 18 years that range from 2000 to 2017. Non-performing loan (NPL) is used as a proxy for credit risk and data regarding NPL is collected from the World Bank Database. Corruption scores are collected from the Transparency International reports. Panel regression results provide a positive association between corruption and credit risk for the global sample. Generalized Methods of Moments regression and robustness tests validate the findings. However, sub-sample analysis provides support for “grease the wheel” hypothesis for high corruption countries and indicates that corruption is beneficial in a weak form of governance and excessive regulatory pressure. This study advocate for the importance of strong governance mechanisms in high corruption countries that can minimize the impact of corruption on banking sector profitability and ensure economic development. Unlike past literature, we provide global evidence on the association between corruption and credit risk for the banking sector which allows generalizability.

腐败与经济增长有着复杂的关系。我们已从全球角度探讨了腐败对信用风险的影响。该样本包括178个国家，涵盖从2000年到2017年的18年。不良贷款（NPL）被用作信用风险的代理，有关不良贷款的数据从世界银行数据库中收集。腐败分数是从透明国际报告中收集的。面板回归结果为全球样本提供了腐败与信用风险之间的正相关关系。广义矩矩回归和稳健性测试验证了这一发现。但是，子样本分析为高腐败国家的“加油轮”假设提供了支持，并表明，在治理形式薄弱和监管压力过大的情况下，腐败是有益的。这项研究主张在高腐败国家建立强有力的治理机制的重要性，这种机制可以最大程度地减少腐败对银行业盈利能力的影响并确保经济发展。与过去的文献不同，我们为银行业的腐败和信用风险之间的关联提供了全球证据，这可以推广。