Kedir, A.M. orcid.org/0000-0002-0728-8807, Iftikhar, S.F., Murinde, V. et al. (1 more author) (2018) Bank fragility in Africa: GMM dynamic panel data evidence. Transnational Corporations Review. pp. 1-9. ISSN 1918-6444
Abstract
This study investigates the impact of bank-level and macroeconomic variables on bank fragility using a dynamic two-step GMM panel estimator on 433 banks in 46 African countries over the period 1997–2012. The study finds that both bank characteristics and macroeconomic variables are key drivers of bank fragility. The past experience of higher levels of non-performing loans (NPLs) significantly and positively determines current levels of NPLs. The growth of gross loan is negative and significant but economic growth leads to higher NPLs. The equity to assets ratio and the log of assets of banks are negatively associated with NPLs suggesting their potential to provide buffers to banks. Equally, total assets reduce bank fragility. These findings have important policy implications. The study shows that credit risk management initiatives, bank operation oversight and regulations should not be restricted in the times of financial crises, even during positive economic growth episodes in the business cycle.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2018 Taylor & Francis |
Keywords: | Bank characteristics; macroeconomic variables; regulation; NPLs; GMM |
Dates: |
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Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Management School (Sheffield) |
Depositing User: | Symplectic Sheffield |
Date Deposited: | 22 Jun 2018 11:04 |
Last Modified: | 22 Jun 2018 11:04 |
Published Version: | https://doi.org/10.1080/19186444.2018.1475105 |
Status: | Published |
Publisher: | Taylor & Francis |
Refereed: | Yes |
Identification Number: | 10.1080/19186444.2018.1475105 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:132431 |