Bribes, market power and access to credit: evidence from cross-country firm-level data

This paper used multi-country firm-level data covering 104 countries for the period from 2010 to 2019 to investigate the effects of bribery on credit access for firms holding bargaining power and/or facing market competition. We used firms’ size and legal status to capture their bargaining power, while the levels of market competition were analyzed according to the number of competitors in the same working field. Our empirical results provided evidence to support the “greasing-the-wheels-of-credit access” hypothesis. Furthermore, the effects of bribery become stronger for larger-sized or formally registered firms, and those facing no market competition. These effects also become pronounced if we controlled the endogeneity problem. © 2021, The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.