Corruption perception index and lending activities of Vietnamese commercial banks

Abstract

This article examines the effect of corruption perception on the lending activities of commercial banks in Vietnam. A panel sample includes 28 commercial banks from 2012 to 2022. This research collected data from audited financial reports of commercial banks, the World Bank, and the International Transparency Organization. The results from SGMM estimation indicate a positive relationship between the Corruption Perception Index (CPI) and the loan-to-asset ratio (LOANS), as well as the loan growth rate (GRLOANS) of commercial banks in Vietnam during the study period. The positive relationship implies that enhancing corruption perception improves business environment transparency, thereby increasing commercial banks' lending activities in Vietnam. Additionally, by providing pioneering evidence on the relationship between corruption perception and lending activities of commercial banks in Vietnam, this paper's findings offer policy implications for bank managers and macroeconomic policymakers related to transparency in the business environment through enhancing corruption perception and improving lending activities of commercial banks in Vietnam.