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Determinants of household debt in emerging economies: A macro panel analysis

Author

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  • Khairunnisa Abd Samad
  • Siti Nurazira Mohd Daud
  • Nuradli Ridzwan Shah Mohd Dali

Abstract

A rapid increase in household debt is undeniably a main concern among policymakers. Studies indicating the damaging effect of rapid rise in household debt towards economic growth attracted many researchers to determine its reasons. The risk from high household debt is not only applicable to advanced economies, but also inherent in emerging economies. Thus, the present study examines the leading causes of household debt in emerging economies. The study employs a bias-corrected least square dummy variable for the period of 1995–2018. The results show positive and significant effects of financial development, house prices, and lending interest rate. Meanwhile, unemployment rate and inflation are negatively associated with household debt. The study therefore urges policymakers, relevant authority and financial institutions to employ suitable and effective policy to mitigate the factors identified in the rise of household debt.

Suggested Citation

  • Khairunnisa Abd Samad & Siti Nurazira Mohd Daud & Nuradli Ridzwan Shah Mohd Dali, 2020. "Determinants of household debt in emerging economies: A macro panel analysis," Cogent Business & Management, Taylor & Francis Journals, vol. 7(1), pages 1831765-183, January.
    • Handle: RePEc:taf:oabmxx:v:7:y:2020:i:1:p:1831765
    DOI: 10.1080/23311975.2020.1831765
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    Cited by:

    1. Benyan Tan & Yingzhu Guo & Yan Wu, 2024. "The influence and mechanism of female-headed households on household debt risk: empirical evidence from China," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    2. Enache Calcedonia, 2022. "Macroeconomic Determinants of Household Indebtedness in Romania: An Econometric Approach," Journal of Social and Economic Statistics, Sciendo, vol. 11(1-2), pages 102-117, December.
    3. Ana Romão & Ricardo Barradas, 2024. "Macroeconomic determinants of households' indebtedness in Portugal: What really matters in the era of financialisation?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 383-401, January.
    4. Lukáš Fiala, 2021. "Modelling of mortgage debt´s determinants: the case of the Czech Republic," FFA Working Papers 4.002, Prague University of Economics and Business, revised 15 Jan 2022.
    5. Juniours Marire, 2024. "Interactive influence of house prices and the repo rate on household debt in South Africa," Journal of Economic Analysis, Anser Press, vol. 3(1), pages 58-78, March.
    6. Paravee Maneejuk & Sopanid Teerachai & Atinuch Ratchakit & Woraphon Yamaka, 2021. "Analysis of Difference in Household Debt across Regions of Thailand," Sustainability, MDPI, vol. 13(21), pages 1-24, November.
    7. Norliza Che Yahya & Bushra Mohd Zaki & Nik Norain Izzati Nik Azid & Nur Fatihah Mohd Ali & Nor Amanie Najihah Hussain, 2023. "The Determinants of Household Debt in Malaysia," Information Management and Business Review, AMH International, vol. 15(3), pages 183-194.

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