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Re-examining the Determinants of Non-Performing Loans in Ghana’s Banking Industry: Role of the 2007–2009 Financial Crisis

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  • Franklin Amuakwa-Mensah
  • George Marbuah
  • Dinah Ani-Asamoah Marbuah

Abstract

This paper uses robust econometric methods to estimate the determinants of non-performing loans (NPLs) with a specific focus on the role of the 2007–2009 financial crisis in explaining NPLs in the banking industry of Ghana. Findings suggest that non-performing loans are significantly affected by bank-specific, industry, and macroeconomic variables. We observed heterogeneity in the determinants of NPLs for sub-samples of the data. The effect of the financial crisis on NPLs is observed to be conditional on the level of credit risk in our sub-sample analysis. The results from the impulse response corroborate that of the regression estimation.

Suggested Citation

  • Franklin Amuakwa-Mensah & George Marbuah & Dinah Ani-Asamoah Marbuah, 2017. "Re-examining the Determinants of Non-Performing Loans in Ghana’s Banking Industry: Role of the 2007–2009 Financial Crisis," Journal of African Business, Taylor & Francis Journals, vol. 18(3), pages 357-379, July.
    • Handle: RePEc:taf:wjabxx:v:18:y:2017:i:3:p:357-379
    DOI: 10.1080/15228916.2017.1308199
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    References listed on IDEAS

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    1. Stijn Claessens & M. Ayhan Kose, 2013. "Financial Crises: Explanations, Types and Implications," CAMA Working Papers 2013-06, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    2. Stijn Claessens & Neeltje van Horen, 2015. "The Impact of the Global Financial Crisis on Banking Globalization," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 63(4), pages 868-918, November.
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    Cited by:

    1. Aswini Kumar Mishra & Shikhar Jain & Mohammad Abid, 2021. "Non‐performing assets and its determinants in the Indian banking system: An empirical analysis using dynamic panel data models," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(4), pages 5948-5962, October.
    2. Segun Thompson Bolarinwa & Richard Olaolu Olayeni & Xuan Vinh Vo, 2021. "Is there a nonlinear relationship between nonperforming loans and bank profitability? Evidence from dynamic panel threshold," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(3), pages 649-661, April.
    3. Segun Thompson Bolarinwa & Olawale Akinyele & Xuan Vinh Vo, 2021. "Determinants of nonperforming loans after recapitalization in the Nigerian banking industry: Does efficiency matter?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(6), pages 1509-1524, September.
    4. Efobi, Uchenna & Asongu, Simplice & Okafor, Chinelo & Tchamyou, Vanessa & Tanankem, Belmondo, 2019. "Remittances, finance and industrialisation in Africa," Journal of Multinational Financial Management, Elsevier, vol. 49(C), pages 54-66.
    5. Asongu, Simplice & Uduji, Joseph & Okolo-Obasi, Elda, 2020. "Political instability and political terror: global evidence on persistence," MPRA Paper 103147, University Library of Munich, Germany.
    6. Imad Jabbouri & Maryem Naili, 2020. "Determinants of Nonperforming Loans in Emerging Markets: Evidence from the MENA Region," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 22(04), pages 1-33, February.

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