Credit expansion, bank liberalization, and structural change in bank asset accounts

Liu, Keqing; Fan, Qingliang

doi:10.1016/j.jedc.2021.104066

Cited by 3 publications

(3 citation statements)

References 36 publications

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“…However, credit constraints inhibits company growth while access to credit positively affects company performance (Fowowe, 2017). Meanwhile, macroeconomic factors influence NPLs risks (Erdinc & Abazi, 2014;Haniifah, 2015;Umar & Sun, 2018), impact LLR risks (Isa et al, 2018;Olszak et al, 2018); affect loan growth risks (Awdeh, 2017;K. Liu & Fan, 2021;Z.…”

Section: Literature Reviewmentioning

confidence: 99%

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The Effects of the Interactions Between Agro-Production, Economic, and Financial Development on Bank Sustainability

Zheng

Jean-Petit

2023

SAGE Open

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The Sub-Saharan African region encounters a deficiency in agricultural financing, which can be attributed to its constraints in accessing international investments in general and the low engagement of bank risk-taking in particular. This situation leads to underproduction, which exacerbates poverty and malnutrition in the region. Thus, this study investigates the impact of the interaction effects between agricultural production, economic development (ED), and financial development (FD via FDI and DC) on bank stability ratios across 40 countries, encompassing 350 operational banks, during the period covering 2010 to 2019. The research employs the Generalized Method of Moments (GMM) technique and verifies its consistency with Two-Stage Least Squares (2SLS) and the Z-Score Approach. The results highlight two findings: first, the interaction effects between economic development, agricultural production, and financial development factors have significantly greater impacts on bank sustainability than their individual effects without interactions. Secondly, these interaction effects sustain significantly bank stability in two ways: on the one hand, they increase bank returns (through both ROE and ROA), while on the other hand, they reduce bank riskiness (via negative effects on NPL and positive effects on LLR). The study concludes that those interaction effects significantly sustain the stability of the African banking system. The SS African states (via their central banks) should promote farming finance services and enforce a minimum ratio of farming loans for each commercial bank’s credit portfolio as a solution to the investment deficiency in the sector. Hence, this can solve food production level issues, ensure food security, and effectively sustain both the banking system and real economic development.

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Section: Literature Reviewmentioning

confidence: 99%

“…Meanwhile, macroeconomic factors influence NPLs risks (Erdinc & Abazi, 2014; Haniifah, 2015; Umar & Sun, 2018), impact LLR risks (Isa et al, 2018; Olszak et al, 2018); affect loan growth risks (Awdeh, 2017; K. Liu & Fan, 2021; Z.…”

Section: Literature Reviewmentioning

confidence: 99%

The Effects of the Interactions Between Agro-Production, Economic, and Financial Development on Bank Sustainability

Zheng

Jean-Petit

2023

SAGE Open

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“…Drawing on the theoretical foundations of the debt-growth nexus [4,[7][8][9], our paper explores the effects of household debt and the oil price shocks on economic growth, which have received much attention recently [10,11]. To understand the relationship between household debt, the oil price, and output growth, it is important to analyze the interdependence among them.…”

Section: Introductionmentioning

confidence: 99%

The Effects of Household Debt and Oil Price Shocks on Economic Growth in the Shadow of the Pandemic

Zhang

Xue

et al. 2022

Sustainability

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In a sample of 34 countries during 1965Q2 to 2021Q3, this paper offers an empirical analysis of how household debt and oil price shocks influence economic growth in the shadow of the pandemic. We exploit the quarter lags inherent in the response of debt and the oil price to output to pin down the relationship between household debt, the oil price, and economic growth in an unrestricted panel VAR model. We find that household debt has a short-term positive impact on economic growth, and this impact is lagged, while oil price shocks have a negative effect on economic growth. Pandemic uncertainty has an obvious and positive effect on household debt, while it has an obvious and negative effect on economic growth and oil price. The results hold under several robustness tests.

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Partners in debt: An endogenous non-linear analysis of the effects of public and private debt on growth

Caner

Fan

Grennes

2021

International Review of Economics & Finance

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Credit expansion, bank liberalization, and structural change in bank asset accounts

Cited by 3 publications

References 36 publications

The Effects of the Interactions Between Agro-Production, Economic, and Financial Development on Bank Sustainability

The Effects of the Interactions Between Agro-Production, Economic, and Financial Development on Bank Sustainability

The Effects of Household Debt and Oil Price Shocks on Economic Growth in the Shadow of the Pandemic

Partners in debt: An endogenous non-linear analysis of the effects of public and private debt on growth

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