Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/317269 
Year of Publication: 
2024
Citation: 
[Journal:] Organizations and Markets in Emerging Economies [ISSN:] 2345-0037 [Volume:] 15 [Issue:] 2 [Year:] 2024 [Pages:] 356-377
Publisher: 
Vilnius University Press, Vilnius
Abstract: 
This paper investigates the effects of cost efficiency on non-performing loans (NPLs) in Zim-babwe during dollarisation. The research applies the random effects and bootstrap quantile regression models using the full dollarisation era dataset for 13 banks from 2009 to 2017. The obtained results revealed that: (i) the average cost efficiency score for the Zimbabwean banking industry is 81.36%, (ii) improvement in cost efficiency leads to an increase in NPLs but begins to fall for a cost inefficiency level of 7.14% and below, (iii) the effect of bank cost efficiency on NPLs is prominent and highly significant at a higher quantile (90th), (iv) the interaction effect between cost efficiency and bank size on NPLs is negative and significant. According to these results, NPLs tend to fall when large banks are more cost-efficient. Thus, the present study recommends that banks employ strategies that simultaneously improve the asset base and cost efficiency.
Subjects: 
non-performing loans
cost efficiency
skimping hypothesis
dollarisation
quantile regression
quadratic regression
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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