This paper examines how national culture influences corruption in bank lending. Using a sample covering 3,835 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. This positive link between collectivism and bank corruption is stronger in small and medium firms, privately owned firms, and non-export firms, while it is weaker in countries with stronger uncertainty avoidance, a higher (lower) fraction of foreign-owned (government-owned) banks, a higher number of large banks, and stronger legal institutions.
Keywords: Banking and Finance; National Culture; Corruption; Fraud
