Journal of International Business Studies

, Volume 44, Issue 4, pp 363–390

Collectivism and corruption in bank lending

  • Xiaolan Zheng
  • Sadok El Ghoul
  • Omrane Guedhami
  • Chuck C Y Kwok


This paper examines how national culture, and collectivism in particular, influences corruption in bank lending. We hypothesize that interdependent self-construal and particularist norms in collectivist countries lead to a higher level of lending corruption through their influence both on the interactions between bank officers and bank customers and on the dynamics among bank colleagues. Using a sample covering 3835 firms across 38 countries, we find strong evidence that firms domiciled in collectivist countries perceive a higher level of lending corruption than firms domiciled in individualist countries. In terms of economic magnitude, the effect of collectivism is substantially larger than the effects of other cultural dimensions (uncertainty avoidance, masculinity, and power distance) and institutional factors identified in prior studies (bank supervision, bank competition, information sharing, and media monitoring). We further find that the positive relationship between collectivism and lending corruption is not driven by endogeneity, and that it is robust to different measures of bank corruption, different measures of collectivism, and different estimation methods. Finally, we find that the link between collectivism and lending corruption cannot be explained by the role of the government in the economy, political connections, biased responses from disgruntled borrowers, or relationship lending.


banking and finance national culture corruption 

Supplementary material

41267_2013_BFjibs201319_MOESM1_ESM.doc (480 kb)
Supplementary Information


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Copyright information

© Academy of International Business 2013

Authors and Affiliations

  • Xiaolan Zheng
    • 1
  • Sadok El Ghoul
    • 2
  • Omrane Guedhami
    • 3
  • Chuck C Y Kwok
    • 3
  1. 1.Nottingham University Business School (NUBS) ChinaNingboChina
  2. 2.Campus Saint-Jean, University of AlbertaEdmontonCanada
  3. 3.Moore School of Business, University of South CarolinaColumbiaUSA

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