Title: Linear and asymmetric analyses of macro-economic and bank-specific determinants of non-performing loans in West African Monetary Zone (WAMZ)

Authors: Ebere Ume Kalu; Augustine C. Arize; John Malindretos; Kalu Idika Awa; Chiamaka Goodness Eze

Addresses: Department of Banking and Finance, University of Nigeria, Nsukka, Enugu, Nigeria ' Economics and Finance Department, College of Business Texas A&M University-Commerce, Commerce, Texas, USA ' Cotsakos College of Business, William Paterson University, Wayne, New Jersey, USA ' Department of Financial Studies, National Open University of Nigeria, Abuja, Nigeria ' Department of Banking and Finance, University of Nigeria, Nsukka, Enugu, Nigeria

Abstract: We used Panel ARDL and Panel NARDL to investigate the macro-economic and bank-specific determinants of Non-Performing Loan (NPL) in the West African Monetary Zone (WAMZ) for the period 2003 to 2018. We found that both bank-specific and macro-economic determinants jointly influence NPLs in varying degrees. There is also empirical evidence that NPL adjusts more non-linearly/asymmetrically to the dynamics of the bank-specific and macro-economic determinants than it does linearly. This discovery will guide in rebalancing the policy direction in loan and credit administration from just a linear direction to a combination of linear and nonlinear perspectives especially in the WAMZ.

Keywords: panel ARDL; panel NARDL; asymmetry; ROA; return on assets; ROE; return on equity; non-performing loans.

DOI: 10.1504/WREMSD.2021.117447

World Review of Entrepreneurship, Management and Sustainable Development, 2021 Vol.17 No.5, pp.670 - 691

Received: 26 May 2020
Accepted: 26 May 2020

Published online: 07 Sep 2021 *

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