Analysis of the Responsiveness of Environmental Sustainability to Non-Performing Loans in Africa

Albert Henry Ntarmah, Yusheng Kong, Eric Cobbinah, Micheal Kobina Gyan and Emmanuel Kwaku Manu

Asian Journal of Applied Economics, 2020, vol. 27, issue 2

Abstract: This study draws on Sustainable Development Goal 12 to analyze the responsiveness of environmental sustainability to non-performing loans (NPLs) in Africa over the period 2000–2016. We explore (1) how environmental sustainability reacts to shocks from NPLs and (2) heterogeneous responses of environmental sustainability to NPLs. We employed Generalized Method of Moment (GMM) style panel Vector Autoregressive and panel quantile regression models to investigate the phenomenon. Our results revealed that conditioning on other sustainability determinants, environmental sustainability responds negatively to NPLs. The impulse response function revealed that the impact of one standard deviation shock in rising NPLs on environmental sustainability is negative from year 1 to year 6 and equal to zero from years 7 to 10. Besides, the quantile regression revealed heterogeneous responses indicating that compared with countries distributed along a high environmentally sustainable path, countries on a low environmentally sustainable path suffer more environmental issues resulting from rising NPLs.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:thkase:334399

DOI: 10.22004/ag.econ.334399

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