Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/217687 
Authors: 
Year of Publication: 
2019
Citation: 
[Journal:] Journal of Central Banking Theory and Practice [ISSN:] 2336-9205 [Volume:] 8 [Issue:] 3 [Publisher:] De Gruyter Open [Place:] Warsaw [Year:] 2019 [Pages:] 95-110
Publisher: 
De Gruyter Open, Warsaw
Abstract: 
Banking sector is important for various macroeconomic and microeconomic variables in terms of mobilization of funds, increasing savings, and providing alternative investment instruments suited to the every person by minimizing the risk of adverse selection and moral hazard, allocating funds to most productive projects, risk diversification. Therefore, sound functioning of the banking sector is critical especially for emerging and developing countries. This study explores the macroeconomic, institutional, and bank-specific factors behind nonperforming banking loans as an indicator of banking sector functioning in emerging market economies over the 2000-2013 period by employing the system GMM dynamic panel data estimator. Results of the dynamic panel regression analysis showed that economic growth, inflation, economic freedom (institutional development), return on assets and equity, regulatory capital to risk-weighted assets, and noninterest income to total income affected nonperforming loans negatively, while unemployment, public debt, credit growth, lagged values of nonperforming loans, cost to income ratio and financial crises affected nonperforming loans positively.
Subjects: 
Non-performing loans
macroeconomic factors
institutional factors
bank-specific factors
economic freedom
credit risk
emerging market economies
JEL: 
C23
E60
G21
G28
G32
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Article

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