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External Liabilities, Domestic Institutions and Banking Crises in Developing Economies

Nabila Boukef Jlassi (), Helmi Hamdi () and Joseph Joyce ()

MPRA Paper from University Library of Munich, Germany

Abstract: We investigate the impact of foreign equity and debt on the occurrence of banking crises in 61 lower-income and middle-income economies during the 1984-2010 period. We also focus on the effects of domestic institutions on banking crises and whether they mitigate or exacerbate the impact of the external liabilities. We find that FDI liabilities lower the probability of a crisis, while debt liabilities increase their incidence. However, institutions that lower financial or political risk partially offset the impact of debt liabilities, as does government stability. A decrease in investment risk directly reduces the incidence of banking crises.

Keywords: banking crises; FDI; portfolio; debt; institutions (search for similar items in EconPapers)
JEL-codes: F32 F34 G15 G21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban
Date: 2016-05-24, Revised 2017-04-06
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Related works:
Journal Article: External liabilities, domestic institutions and banking crises in developing economies (2018) Downloads
Working Paper: External liabilities, domestic institutions and banking crises in developing economies (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:81120

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