Pregledni rad
https://doi.org/10.22598/iele.2023.10.2.6
THE IMPACT OF ECONOMIC GROWTH ON NON-PERFORMING LOANS IN WESTERN BALKAN COUNTRIES
Beka Artenisa
orcid.org/0000-0001-8358-1311
; Faculty of Business and Economics, ”Southeast European University”, Tetovo, North Macedonia,
Abazi-Alili Hyrije
; Faculty of Business and Economics, “Southeast European University”, Tetovo, North Macedonia
Sažetak
The banking industry is considered one of the most crucial to the economy’s stability and growth. Moreover, the performance of the banking industry in developing countries is directly affected by non-performing loans (NPL). Using dynamic model estimation methods, this research aims to investigate the relationship between economic growth (measured by macroeconomic indicators) and non-performing loans in six Western Balkan countries during the period of 2010 to 2021. Non-performing loans (NPLs) rate may be mostly described by significant macroeconomic parameters, such as GDP growth (annual %), lending interest rate, central government debt, unemployment, and inflation. To measure this impact we employed OLS, OLS Robust, Fixed Effect (FE), Random Effect (RE), and Generalized Method of Moments (GMM), which turned out to be the most effective method through the results generated by applying the Sargan Test. Based on the results generated, GDP has a positive effect on the growth of non-performing loans, the lending interest rate, and the central government debt, all of which have a significant positive effect on the growth of NPL. Additionally, this research provides management. and policymakers with prompt insight into the elements that contribute to non-performing loans. Further, management may take corrective actions and policymakers may examine the relevance of the macroeconomic situation.
Ključne riječi
GDP; lending interest rate; central government debt; unemployment; inflation
Hrčak ID:
313117
URI
Datum izdavanja:
29.12.2023.
Posjeta: 255 *