Re-examining the Determinants of Non-Performing Loans in Ghana’s Banking Industry: Role of the 2007–2009 Financial Crisis |
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| Authors: | Franklin Amuakwa-Mensah George Marbuah Dinah Ani-Asamoah Marbuah |
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| Institution: | 1. Department of Economics, Swedish University of Agricultural Sciences (SLU), Uppsala, Sweden;2. Africa Centre for Applied Economics and Policy Research, Ghana;3. Department of Business Studies, Uppsala University, Uppsala, Sweden |
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| Abstract: | This paper uses robust econometric methods to estimate the determinants of non-performing loans (NPLs) with a specific focus on the role of the 2007–2009 financial crisis in explaining NPLs in the banking industry of Ghana. Findings suggest that non-performing loans are significantly affected by bank-specific, industry, and macroeconomic variables. We observed heterogeneity in the determinants of NPLs for sub-samples of the data. The effect of the financial crisis on NPLs is observed to be conditional on the level of credit risk in our sub-sample analysis. The results from the impulse response corroborate that of the regression estimation. |
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| Keywords: | NPLs bad debt financial crisis system GMM banking industry Ghana |
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