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Governance matters on non-performing loans: Evidence from emerging markets

Author

Listed:
  • Burak Byükoglu

    (Gaziantep Üniversitesi, Turkey)

  • Ahmet Šit

    (Malatya Turgut Özal Üniversitesi, Turkey)

  • Ibrahim Halil Ekši

    (Gaziantep Üniversitesi, Turkey)

Abstract
In this study, new determinants of non-performing loans (NPL) for the MSCI emerging countries were investigated. For this purpose, a new index was formed using the World Bank's Worldwide Governance Indicator data from 2002 to 2018. To test the effect of governance on NPL, we used the GMM technique. As a robustness test for GMM results, we employed the DOLSMG technique. According to the results, NPL was affected negatively by the governance index. This result could be of interest to policymakers and regulators as a macroprudential policy tool.

Suggested Citation

  • Burak Byükoglu & Ahmet Šit & Ibrahim Halil Ekši, 2021. "Governance matters on non-performing loans: Evidence from emerging markets," PSL Quarterly Review, Economia civile, vol. 74(296), pages 75-91.
    • Handle: RePEc:psl:pslqrr:2021:14
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    File URL: https://rosa.uniroma1.it/rosa04/psl_quarterly_review/article/view/17486/16694
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    More about this item

    Keywords

    Non-performing loans; Worldwide Governance Indicators;

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G2 - Financial Economics - - Financial Institutions and Services

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