Credit risk, managerial behaviour and macroeconomic equilibrium within dual banking systems: Interest-free vs. interest-based banking industries
Awatef Louhichi and
Younes Boujelbene
Research in International Business and Finance, 2016, vol. 38, issue C, 104-121
Abstract:
In this paper, an attempt has been made to explore the determinants of credit risk in the banking system with a particular interest toward the Islamic banking industry. We analyze the link between credit risk and a set of bank-specific and macroeconomic along with institutional variables using two complementary approaches. First, we investigate the factors of credit risk using one-step generalized method of moments (GMM) system estimator. Then, we explore the feedback between credit risk and its determinants in a panel vector autoregressive (PVAR) model. We have used a sample of Middle Eastern, North African (MENA) and Asian countries to apply our model. The major purpose of this paper is to find factors that could explain credit risk within the interest-free banking system relative to the interest-based one.
Keywords: NPLs; Macro-financial linkages; GMM estimator; Panel VAR analysis; Islamic banking system (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (23)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:38:y:2016:i:c:p:104-121
DOI: 10.1016/j.ribaf.2016.03.014
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