Banking Crises in Developing Countries-What Crucial Role of Exchange Rate Stability and External Liabilities?

Brahim Gaies, Stéphane Goutte and Khaled Guesmi

Working Papers from HAL

Abstract: We examine the determinants of banking crises occurrence in developing countries, focusing on the impact of the nature of external liabilities and exchange rate stability. For this purpose, we use a logit panel model, including 67 developing countries observed between 1972 and 2011, as well as a set of alternative estimation methods (logit fixed-effects and probit random-effects) and robustness tests. We find that FDI liabilities reduce the occurrence of banking crises, but debt liabilities increase them. In addition, banking crises occurrence decreases in developing countries with the stability of the exchange rate, real GDP growth, as well as better human capital quality and better political institutions.

Keywords: Financial Crises; External Liabilities; Exchange Rate Stability (search for similar items in EconPapers)
Date: 2019-01-09
New Economics Papers: this item is included in nep-ban and nep-his
Note: View the original document on HAL open archive server: https://hal.science/hal-01968084
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://hal.science/hal-01968084/document (application/pdf)

Related works:
Journal Article: Banking crises in developing countries–What crucial role of exchange rate stability and external liabilities? (2019)
Working Paper: Banking crises in developing countries–What crucial role of exchange rate stability and external liabilities? (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-01968084

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().