IDEAS home Printed from https://ideas.repec.org/a/cml/moneta/viy2013i2p371-400.html
   My bibliography  Save this article

Assessing the Impact of Nonperforming Loans on Economic Growth in The Bahamas

Author

Listed:
  • Alwyn Jordan

    (Central Bank of The Bahamas)

  • Carisma Tucker

    (Central Bank of The Bahamas)

Abstract

This paper examines the extent to which economic output and other variables affect nonperforming loans in The Bahamas utilizing a vector error correction (vec) model. It also seeks to determine if there is a feedback response from nonperforming loans to economic growth. Data utilized in the study spanned the period September 2002 to December 2011. The main findings reveal that growth in economic activity tends to lead to a reduction in nonperforming loans, and there is additionally a small but significant feedback effect from nonperforming loans to output.

Suggested Citation

  • Alwyn Jordan & Carisma Tucker, 2013. "Assessing the Impact of Nonperforming Loans on Economic Growth in The Bahamas," Monetaria, CEMLA, vol. 0(2), pages 371-400, July-Dece.
    • Handle: RePEc:cml:moneta:v:i:y:2013:i:2:p:371-400
    as

    Download full text from publisher

    File URL: http://www.cemla.org/PDF/monetaria/PUB-MON-I-02.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mr. Raphael A Espinoza & Mr. Ananthakrishnan Prasad, 2010. "Nonperforming Loans in the GCC Banking System and their Macroeconomic Effects," IMF Working Papers 2010/224, International Monetary Fund.
    2. Mr. Reinout De Bock & Mr. Alexander Demyanets, 2012. "Bank Asset Quality in Emerging Markets: Determinants and Spillovers," IMF Working Papers 2012/071, International Monetary Fund.
    3. Pesaran, H. Hashem & Shin, Yongcheol, 1998. "Generalized impulse response analysis in linear multivariate models," Economics Letters, Elsevier, vol. 58(1), pages 17-29, January.
    4. Nir Klein, 2013. "Non-Performing Loans in CESEE: Determinants and Impact on Macroeconomic Performance," IMF Working Papers 2013/072, International Monetary Fund.
    5. Frain, John C., 2004. "A RATS subroutine to implement the Chow-Lin distribution/interpolation procedure," Research Technical Papers 2/RT/04, Central Bank of Ireland.
    6. Khemraj, Tarron & Pasha, Sukrishnalall, 2009. "The determinants of non-performing loans: an econometric case study of Guyana," MPRA Paper 53128, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Ying & Zhai, Ling & Sun, Haijia, 2019. "Does the level of financial leasing matter in the impact of bank lending on economic growth: Evidence from the global market (2006–2016)," Finance Research Letters, Elsevier, vol. 30(C), pages 352-359.
    2. Noel, Dorian M. & Bangwayo-Skeete, Prosper F. & Brei, Michael & Robinson, Justin, 2021. "Sovereign risk spill-overs in the banking sectors of Central America and the Caribbean," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 73(C).
    3. Quoc Trung Nguyen Kim, 2022. "The Effect of Agency Problem and Internal Control on Credit Risk at Commercial Banks in Vietnam," International Journal of Asian Business and Information Management (IJABIM), IGI Global, vol. 13(1), pages 1-22, January.
    4. Helena Ahulu & John MacCarthy & Paul Muda, 2021. "Financial Stability and Economic Growth Nexus: Evidence from Sub-Saharan Africa using Panel Data," International Journal of Economics and Financial Issues, Econjournals, vol. 11(4), pages 11-18.
    5. Ngo Nu Dieu KHUE & Ya-Wen LAI, 2020. "Threshold Effects of Inflation on the Banking Sector Performance in the ASEAN-6 Countries," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 117-133, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Josué Fernando Cortés Espada, 2013. "Estimating the Exchange Rate Pass-Through to Prices in Mexico," Monetaria, CEMLA, vol. 0(2), pages 287-316, July-Dece.
    2. Andrés González & Segio Ocampo & Julián Pérez & Diego Rodríguez, 2013. "Output Gap and Neutral Interest Measures of Colombia," Monetaria, CEMLA, vol. 0(2), pages 231-286, July-Dece.
    3. Alberto Ortiz Bolaños, 2013. "Credit Market Shocks, Monetary Policy, and Economic Fluctuations," Monetaria, CEMLA, vol. 0(2), pages 317-369, July-Dece.
    4. Maria Karadima & Helen Louri, 2021. "Determinants of Non-Performing Loans in Greece: the intricate role of fiscal expansion," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 160, Hellenic Observatory, LSE.
    5. Gulati, Rachita & Goswami, Anju & Kumar, Sunil, 2019. "What drives credit risk in the Indian banking industry? An empirical investigation," Economic Systems, Elsevier, vol. 43(1), pages 42-62.
    6. Ijaz Hussain, 2017. "Corporate Financial Leverage, Asset Utilization and Nonperforming Loans in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 22(1), pages 37-70, Jan-June.
    7. Saom Shawleen Anita & Nishat Tasnova & Nousheen Nawar, 2022. "Are non-performing loans sensitive to macroeconomic determinants? an empirical evidence from banking sector of SAARC countries," Future Business Journal, Springer, vol. 8(1), pages 1-16, December.
    8. Vasiliki Makri, 2016. "Towards an Investigation of Credit Risk Determinants in Eurozone Countries," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 15(1), pages 27-57, March.
    9. Miyajima Ken, 2017. "An Empirical Investigation of Oil-Macro-financial Linkages in Saudi Arabia," Review of Middle East Economics and Finance, De Gruyter, vol. 13(2), pages 1-15, August.
    10. Aleš Melecký & Martin Melecký & Monika Šulganová, 2015. "Úvěry v selhání a makroekonomika: modelování systémového kreditního rizika v České republice [Non-Performing Loans and The Macroeconomy: Modeling the Systemic Credit Risk in the Czech Republic]," Politická ekonomie, Prague University of Economics and Business, vol. 2015(8), pages 921-947.
    11. Svetozar Tanasković & Maja Jandrić, 2015. "Macroeconomic and Institutional Determinants of Non-performing Loans," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 4(1), pages 47-62.
    12. Bogdan Florin FILIP, 2017. "Lessons From The Impact Of Internal And Macroeconomic Determinants Of Bad Loans In Cee Banks," EURINT, Centre for European Studies, Alexandru Ioan Cuza University, vol. 4, pages 198-212.
    13. Ghosh, Amit, 2017. "Sector-specific analysis of non-performing loans in the US banking system and their macroeconomic impact," Journal of Economics and Business, Elsevier, vol. 93(C), pages 29-45.
    14. Vasiliki Makri, 2015. "What Triggers Loan Losses? An Empirical Investigation of Greek Financial Sector," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 65(3-4), pages 119-143, july-Dece.
    15. Vasiliki Makri & Athanasios Tsagkanos & Athanasios Bellas, 2014. "Determinants of Non-Performing Loans: The Case of Eurozone," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(2), pages 193-206, March.
    16. Kemal Kozarić & Emina Žunić Dželihodžić, 2020. "Effects of Macroeconomic Environment on Non-Performing Loans and Financial Stability: Case of Bosnia and Herzegovina," Journal of Central Banking Theory and Practice, Central bank of Montenegro, vol. 9(2), pages 5-17.
    17. Vyshnevskyi, Iegor & Sohn, Wook, 2023. "Nonperforming loans and related lending: Evidence from Ukraine," Emerging Markets Review, Elsevier, vol. 57(C).
    18. Us, Vuslat, 2017. "Dynamics of non-performing loans in the Turkish banking sector by an ownership breakdown: The impact of the global crisis," Finance Research Letters, Elsevier, vol. 20(C), pages 109-117.
    19. Vuslat Us, 2016. "Determinants of Non-Performing Loans in the Turkish Banking Sector : What Has Changed After the Global Crisis?," CBT Research Notes in Economics 1627, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    20. Ivan Huljak & Reiner Martin & Diego Moccero & Cosimo Pancaro, 2022. "Do non-performing loans matter for bank lending and the business cycle in euro area countries?," Journal of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 1050-1080, December.

    More about this item

    Keywords

    nonperforming loans; Chow-Lin procedure; impulse-response functions;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cml:moneta:v:i:y:2013:i:2:p:371-400. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Matias Ossandon Busch (email available below). General contact details of provider: https://edirc.repec.org/data/cemlamx.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.