Macro-Financial Covariates of Non-Performing Loans (NPLs) in Pakistani Commercial Banks: A Reexamination Using GMM Estimator

Bilal Mehmood (), Haider Mahmood () and Raisa Shabbir Ahmed
Additional contact information
Raisa Shabbir Ahmed: COMSATS Institute of Information Technology, Lahore, Pakistan

International Journal of Economics and Empirical Research (IJEER), 2014, vol. 2, issue 11, 443-448

Abstract: Non-performing loans has been a limiting factor in smooth growth of commercial banking. To augment the literature in this dimension, this paper subjects the findings of Mehmood et al. (2013) to rigorous statistical treatment and reexamines the relationship found therein. It empirically tests the macro-financial determinants that cause non-performing loans to change. A panel of 13 commercial banks for period of 2003-2012 is subjected to empirical analysis. A more efficient estimator Generalized Method of Moments (GMM) is used to cope with potential endogeneity issues in model that has not been addressed in Mehmood et al. (2013). Macro-Financial determinants non-performing loans are found to be crucial. Policy implications include the policy steps to complement the sound financial system with a healthy macroeconomic environment to reduce non-performing loans in commercial banks in Pakistan.

Keywords: Non Performing Loans; Economic Growth; Endogeneity; GMM (search for similar items in EconPapers)
JEL-codes: G18 G21 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://tesdo.org/shared/upload/pdf/papers/IJEER,%202_11_,%20443-448.pdf (application/pdf)
http://tesdo.org/journal_detail.php?paper_id=103&expand_year=2014 (text/html)

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:ijr:journl:v:2:y:2014:i:11:p:443-448

Access Statistics for this article

International Journal of Economics and Empirical Research (IJEER) is currently edited by Dr. Muhammad Shahbaz (PhD Applied Economics)

More articles in International Journal of Economics and Empirical Research (IJEER) from The Economics and Social Development Organization (TESDO) Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Muhammad Shahbaz (PhD Applied Economics) ( this e-mail address is bad, please contact ).