Title: Macroeconomic determinants of non-performing loans in GCC economies: does the global financial crisis matter?

Authors: Hisham H. Abdelbaki

Addresses: Department of Economics and Finance, Business Administration College, Bahrain University, P.O. Box 32038, Bahrain; Department of Economics, Commerce College, Mansoura University, Egypt

Abstract: This paper uses the OLS, fixed effects, Arellano and Bond GMM and VAR model to empirically examine the macroeconomic determinants of non-performing loans in GCC through the period from 1998 to 2016. The main findings conclude that non-oil GDP growth, domestic credit to private sector to GDP ratio and inflation rate have negative effects on non-performing loans. Whereas, interest rate and financial crisis have positive effects on non-performing loans. The findings also suggest that the domestic credit to private sector to GDP ratio is the main factor affecting non-performing loans in the short run. While, interest rate is the main factor which influences non-performing loans size in the long run is a faster during the period before the financial crisis.

Keywords: non-performing loans; NPLs; fixed effects; panel OLS; Arellano and Bond GMM; VAR; GCC economies.

DOI: 10.1504/IJEBR.2019.099973

International Journal of Economics and Business Research, 2019 Vol.17 No.4, pp.433 - 447

Available online: 27 Mar 2019 *

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