Analyzing Credit Risk Factors: A Western Balkans Case Study

Tringa Danca Hoti, Atdhetar Gara, Besnik Fetai and Arber Hoti

Economic Studies journal, 2024, issue 8, 78-90

Abstract: The purpose of this research paper is to determine factors of credit risk expressed in terms of non-performing loans in six countries of the Western Balkans (Kosovo, Albania, North Macedonia, Bosnia, and Herzegovina, Montenegro, and Serbia). The research uses different econometric techniques for the presentation of econometric models, where 4 models are used: OLS, fixed-effects model, random-effects model, and Hausman Taylor IV estimators. The results from the empirical analysis presented show that unemployment and the real interest rate have a positive impact on the growth of non-performing loans where both coefficients are statistically significant at the 1% level, while other variables (financial stability, economic growth, and inflation) show a statistically significant negative impact. These findings are important for the decision-makers of the financial systems of these countries, especially countries that have limited use of monetary policy, making decisions to create greater financial stability to reduce credit risk.

JEL-codes: G01 G32 J64 O40 P27 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://archive.econ-studies.iki.bas.bg/2024/2024_08/2024_08_04.pdf

Related works:
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:bas:econst:y:2024:i:8:p:78-90

Access Statistics for this article

More articles in Economic Studies journal from Bulgarian Academy of Sciences - Economic Research Institute Contact information at EDIRC.
Bibliographic data for series maintained by Diana Dimitrova ().