Macroeconomic determinants of non-performing loans in GCC economies: does the global financial crisis matter?

Hisham H. Abdelbaki

International Journal of Economics and Business Research, 2019, vol. 17, issue 4, 433-447

Abstract: This paper uses the OLS, fixed effects, Arellano and Bond GMM and VAR model to empirically examine the macroeconomic determinants of non-performing loans in GCC through the period from 1998 to 2016. The main findings conclude that non-oil GDP growth, domestic credit to private sector to GDP ratio and inflation rate have negative effects on non-performing loans. Whereas, interest rate and financial crisis have positive effects on non-performing loans. The findings also suggest that the domestic credit to private sector to GDP ratio is the main factor affecting non-performing loans in the short run. While, interest rate is the main factor which influences non-performing loans size in the long run is a faster during the period before the financial crisis.

Keywords: non-performing loans; NPLs; fixed effects; panel OLS; Arellano and Bond GMM; VAR; GCC economies. (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecbr:v:17:y:2019:i:4:p:433-447

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