Determinants of Nonperforming Loans: A Review of Empirical Evidence

Syed, A.A. (2021), "Determinants of Nonperforming Loans: A Review of Empirical Evidence", Özen, E., Grima, S. and Gonzi, R.D. (Ed.) New Challenges for Future Sustainability and Wellbeing (Emerald Studies in Finance, Insurance, and Risk Management), Emerald Publishing Limited, Bingley, pp. 277-306. h

30 Pages Posted: 13 May 2021

See all articles by Aamir Syed

Aamir Syed

Motilal Nehru National Institute of Technology (MNNIT) - Humanities Department

Date Written: May 11, 2021

Abstract

Purpose: The main purpose of this chapter is to thoroughly investigate the diverse literature available concerning nonperforming loans (NPLs) and its determinants by studying and analyzing the empirical studies from 1985 to 2019.

Design/Methodology: A qualitative approach is being incorporated, and by using content analysis, various previous studies are reviewed and impor- tant issues like the objectives, methodology, key findings, and variables are reported.

Findings: The study tries to compile the main findings from the various studies done concerning NPLs and its determinants. The study shows how various determinants both bank-specific and macroeconomic affect the banking structure and thus the NPLs, in different countries and at different periods of time. The study also highlights how countries’ bank- ing structure got affected by various economic phenomena like recession, contagious effect of the financial crisis, banking Basel norms, and NPL management strategies. Further major issues like data acquisition, lack of data reporting, countries specific banking conditions, methodologies used in the analysis, scarce resources, and disclosure hindrance which are faced by previous studies were also reported.

Originality/Value: As there are very few studies that provide a detailed viewpoint on NPLs and its determinants in this area, this research will provide a concise and detailed framework for the researchers to analyses the diverse literature on NPLs and its determinates.

Keywords: Nonperforming loans; macroeconomic; bank-specific; review; Basel norms; international banking; GMM; VECM; content analysis

JEL Classification: E2; E3; G21

Suggested Citation

Syed, Aamir, Determinants of Nonperforming Loans: A Review of Empirical Evidence (May 11, 2021). Syed, A.A. (2021), "Determinants of Nonperforming Loans: A Review of Empirical Evidence", Özen, E., Grima, S. and Gonzi, R.D. (Ed.) New Challenges for Future Sustainability and Wellbeing (Emerald Studies in Finance, Insurance, and Risk Management), Emerald Publishing Limited, Bingley, pp. 277-306. h, Available at SSRN: https://ssrn.com/abstract=3844880

Aamir Syed (Contact Author)

Motilal Nehru National Institute of Technology (MNNIT) - Humanities Department ( email )

Bhopal
India

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