Governance matters on non-performing loans: Evidence from emerging markets

Burak Byükoglu (), Ahmet Šit () and Ibrahim Halil Ekši ()
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Burak Byükoglu: Gaziantep Üniversitesi, Turkey
Ahmet Šit: Malatya Turgut Özal Üniversitesi, Turkey
Ibrahim Halil Ekši: Gaziantep Üniversitesi, Turkey

PSL Quarterly Review, 2021, vol. 74, issue 296, 75-91

Abstract: In this study, new determinants of non-performing loans (NPL) for the MSCI emerging countries were investigated. For this purpose, a new index was formed using the World Bank's Worldwide Governance Indicator data from 2002 to 2018. To test the effect of governance on NPL, we used the GMM technique. As a robustness test for GMM results, we employed the DOLSMG technique. According to the results, NPL was affected negatively by the governance index. This result could be of interest to policymakers and regulators as a macroprudential policy tool.

Keywords: Non-performing loans; Worldwide Governance Indicators (search for similar items in EconPapers)
JEL-codes: C51 G2 G21 (search for similar items in EconPapers)
Date: 2021
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