Title: Credit risk and bank specific factors: an empirical study using panel GMM

Authors: Renuka Sharma; Kiran Mehta

Addresses: Chitkara Business School, Chitkara University, Punjab, India ' Chitkara Business School, Chitkara University, Punjab, India

Abstract: The issue raised in the current research has significant implications for the banking sector. Banks across the world are highly exposed to credit risk. The current situation of the banking sector in all major markets and the recent financial crisis of 2008 intensified the concern of economists to improve the credit risk management policies of banks. The increasing default rate in corporate loan portfolios and consumer loan portfolios increase the non-performing assets, which can lead to the banking crisis. The current study has explored the extant literature to identify the bank-specific factors affecting the credit risk of banks. The study under consideration is based on secondary data and has applied dynamic panel GMM regression to examine the impact of bank-specific factors on credit risk on Indian banks. The results thus obtained are useful for managers responsible for controlling the credit risk of bank, regulators, policymakers and researchers.

Keywords: credit risk; bank-specific factors; dynamic panel GMM regression; Indian bank.

DOI: 10.1504/IJEBR.2024.136496

International Journal of Economics and Business Research, 2024 Vol.27 No.2, pp.294 - 309

Received: 18 Mar 2021
Accepted: 09 Sep 2021

Published online: 05 Feb 2024 *

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