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The Impact of Oil Price Fluctuations on Bank Lending Power in Iran: An Application of GMM Approach
[El impacto de las fluctuaciones del precio del petróleo en el poder de préstamo bancario en Irán: una aplicación del enfoque GMM]

Author

Listed:
  • Abdi Seyyedkolaee, Mohammad

    (Universidad de Mazandaran (Irán))

  • Aghaei, Majid

    (Universidad de Mazandaran (Irán))

  • Abbaspoor, Parisa

    (Adib-Mazandaran Higher Education Institute (Irán))

Abstract

The abundance of oil resources and the dependence of the state budget on crude oil exports have exposed Iran's single-product economy to oil price fluctuations and its consequences. On the other hand, according to the country's financial system and its being bank-centric, one of the sectors that are constantly affected by oil price fluctuations is the banking system and its performance. To this end, the present study investigated the impact of oil price fluctuations on lending power of specialized banks in Iran using seasonal data from 1999 to 2018 using by Generalized Method of Moments (GMM). The results of this study indicate that during the period under review, oil price fluctuations has been a negative and significant effect (coefficient of -0.01) on the credit growth of specialized banks. In addition, GDP growth and inflation have been, respectively, a positive and negative effect (coefficients of 0.09 and -0.09) on the lending power of specialized banks during the period under review.

Suggested Citation

  • Abdi Seyyedkolaee, Mohammad & Aghaei, Majid & Abbaspoor, Parisa, 2022. "The Impact of Oil Price Fluctuations on Bank Lending Power in Iran: An Application of GMM Approach [El impacto de las fluctuaciones del precio del petróleo en el poder de préstamo bancario en Irán:," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 34(1), pages 177-190, December .
    • Handle: RePEc:pab:rmcpee:v:34:y:2022:i:1:p:177-190
    DOI: https://doi.org/10.46661/revmetodoscuanteconempresa.5537
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    References listed on IDEAS

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    More about this item

    Keywords

    oil shock; bank lending power; Iranian economy; Generalized Method of Moments (GMM); shock del petróleo; poder de préstamo bancario; economía iraní; Método de Momentos Generalizado;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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