"http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd"> Provincial corruption and local development bank performance | Murharsito | Economic Journal of Emerging Markets

Provincial corruption and local development bank performance

Murharsito Murharsito, Fitri Ella Fauziah, Emanuel Kristijadi, Rr. Iramani

Abstract


This paper investigates the effect of provincial corruption on the performance of local development bank, specifically to the profitability and credit quality. We use the data of 26 local development banks in 2012 and 2013. For the provincial corruption measurement we use “Public Institution Openness Index”. Results of this study are first, corruption significantly has a negative effect on the profitability of local development bank. Second, corruption doesn’t affect the credit quality of local development bank. These results are expected to enrich the within country corruption effect to the economic studies, particularly to the local development bank which is infrequently investigated.


Keywords


provincial corruption, regional development bank, profitability, credit quality

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References


Ayaydin, H., & Hayaloglu, P. (2014). The effect of corruption on firm growth: Evidence from firms in Turkey. Asian Economic and Financial Review, 4(5), 607–624.

Bentzen, J.S. (2012). How bad is corruption? Cross-country evidence of the impact of corruption on economic prosperity. Review of Development Economics, 16(1), 167–184. http://doi.org/10.1111/j.1467-9361.2011.00653.x

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DOI: http://dx.doi.org/10.20885/ejem.vol9.iss1.art7

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Economic Journal of Emerging Markets (EJEM)
ISSN 2086-3128 (print), ISSN 2502-180X (online)
Published by:
Center for Economic Studies, Department of Economics,
Universitas Islam Indonesia, Indonesia.

Creative Commons License
EJEM by http://journal.uii.ac.id/index.php/JEP/ is licensed under a Creative Commons Attribution 4.0 International License.