Determinants of non-performing loans in Central and Eastern European countries

Bruna Skarica
Additional contact information
Bruna Skarica: University of Zagreb, Faculty of Economics and Business, Zagreb, Croatia

Financial Theory and Practice, 2014, vol. 38, issue 1, 37-59

Abstract: This paper analyses the determinants of the changes in the non-performing loan (NPL) ratio in selected European emerging markets. The model was estimated on a panel dataset using a fixed effects estimator for seven Central and Eastern European (CEE) countries between Q3:2007 and Q3:2012. The countries analyzed are Bulgaria, Croatia, Czech Republic, Hungary, Latvia, Romania and Slovakia. Although the literature on NPLs is quite extensive, this is the first empirical research on the countries of CEE region using aggregate, country-level data on problem loans. The results suggest that the primary cause of high levels of NPLs is the economic slowdown, which is evident from statistically significant and economically large coefficients on GDP, unemployment and the inflation rate.

Keywords: non-performing loans; macro-financial linkages; Central and Eastern Europe; panel regressions; financial stability (search for similar items in EconPapers)
JEL-codes: E32 E44 E52 G10 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (37)

Downloads: (external link)
http://fintp.ijf.hr/upload/files/ftp/2014/1/skarica.pdf (application/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:ipf:finteo:v:38:y:2014:i:1:p:37-59

Access Statistics for this article

More articles in Financial Theory and Practice from Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Martina Fabris ().