Linear and asymmetric analyses of macro-economic and bank-specific determinants of non-performing loans in West African Monetary Zone (WAMZ)
by Ebere Ume Kalu; Augustine C. Arize; John Malindretos; Kalu Idika Awa; Chiamaka Goodness Eze
World Review of Entrepreneurship, Management and Sustainable Development (WREMSD), Vol. 17, No. 5, 2021

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.

Online publication date: Tue, 07-Sep-2021

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