Governance matters on non-performing loans: Evidence from emerging markets
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 DOI: governance index. This result could be of interest to policymakers and regulators as a macroprudential policy tool.
C51; G21; G2
Non-performing loans; Worldwide Governance Indicators
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Copyright (c) 2021 Burak Byükoğlu, Ahmet Šit, İbrahim Halil Ekši
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