The Relationship Between Household Credit and Banking Stability in Malaysia: Panel Evidence

Nizar, Nurhuda; Karim, Zulkefly Abdul

doi:10.22146/gamaijb.64451

Cited by 4 publications

(3 citation statements)

References 62 publications

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“…A study by Nizar and Karim (2016) in Malaysia reports contrasting results to those of previous studies. Using the autoregressive distributed lag (ARDL) modelling approach, the authors find an inverse relationship between housing prices and both mortgage and consumer debts, with the effects being significant only in the case of mortgage debt.…”

Section: Literature Reviewmentioning

confidence: 60%

“…The literature has shown that the cost of housing, as indicated by housing prices, has a significant impact on household debt, but its direct effects on mortgage debt have been understudied. To date, only a limited number of studies have specifically examined the relationship between housing prices and mortgage debt, and the findings have been inconclusive and have varied across countries (Dajcman, 2020; Nizar and Karim, 2016). Therefore, additional research is needed to develop a more comprehensive understanding of the relationship between housing prices and mortgage debt.…”

Section: Introductionmentioning

confidence: 99%

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The effects of housing price on the mortgage debt in Malaysia: new evidence from FMOLS method

Khan

2023

IJHMA

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Purpose The main purpose of this study is to investigate the impact of housing price on mortgage debt accumulation while considering the structural break effects associated with the Global Financial Crisis (GFC). Design/methodology/approach To determine the existence of a long run relationship among the variables, this study used a Johansen cointegration test. The long run model was then estimated using the fully modified ordinary least square method and reported for both the model with and without a structural break associated with the GFC. Findings The findings demonstrate a moderate positive relationship between housing price and mortgage debt, with the impact of the GFC is positive but insignificant. The household’s lack of responsiveness to the GFC may be attributed to their optimistic expectations and confidence in the Malaysian housing market. Practical implications Findings of this study provide some guidance to policymakers and the banking sector in predicting household borrowing behavior during future economic crises. Originality/value The increase in housing prices and mortgage debt after the GFC has been a concern for many countries, including Malaysia. This study contributes to the literature by investigating the relationship between housing prices and mortgage debt in Malaysia and sheds light on the impact of the GFC on household borrowing behavior. The study’s contributions include providing new evidence to the underexplored topic, enhancing the robustness and reliability of the empirical results and providing insights into the importance of testing for structural breaks in time series analysis.

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Section: Literature Reviewmentioning

confidence: 60%

Section: Introductionmentioning

confidence: 99%

The effects of housing price on the mortgage debt in Malaysia: new evidence from FMOLS method

Khan

2023

IJHMA

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“…The Islamic financing behaviour is consistent with conventional lending behaviour that the Islamic bank financing operates (Zulkhibri, 2018). Currently, bank financing is being shifted from financing for businesses to financing for households (Nizar & Karim, 2021). As the factors or determinants of Islamic home financing in Malaysia were not explicitly discussed in previous studies, this section will delve into the factors influencing the lending growth of banking in Malaysia.…”

Section: Literature Reviewmentioning

confidence: 61%

Short-Run and Long-Run Relationship of Islamic Home Financing in Malaysia: Analysis on Islamic Banks

Idris

Bahari

Ahmad

2022

JEBIS

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Islamic home financing is a service offered by Islamic banks according to the Islamic principle. In Malaysia, it has been offered since the early 1980s. The demand for Islamic home financing in Malaysia has increased over time. Therefore, this study would like to delve into the short-run and long-run relationship between the factors involved in Islamic home financing. Past studies highlighted the microeconomic factors and macroeconomic factors in Islamic banks that contribute to the growth of Islamic home financing in Malaysia. Thus, this study would include four factors comprised of deposits, liabilities, GDP, and government expenditure. Deposits and liabilities are categorized into microeconomic factors, whereas GDP and government expenditure are macroeconomic factors. The first objective is to identify the short-run and long-run relationship between the factors mentioned above on Islamic home financing in Malaysia. The second objective is to analyze the causality effects of the factors on Islamic home financing in Malaysia. The methodology comprises of quantitative research design. Data collection is based on secondary data collection, which was retrieved through documentation review and statistical highlights from Bank Negara Malaysia. The data comprise the first quarter of 2010 until the second quarter of 2021. Analysis data is conducted through an econometric approach within time series data which is the ARDL test and Granger causality test. The findings of this study would emphasize the importance of microeconomic factors and macroeconomic factors on Islamic home financing. It would encourage the supply and growth of Islamic home financing by Islamic banks in Malaysia in the future.

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The effect of credit composition on entrepreneurship

Aghdam,

Behdarvand,

Sheshdeh

2023

Latin American Journal of Central Banking

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The Relationship Between Household Credit and Banking Stability in Malaysia: Panel Evidence

Cited by 4 publications

References 62 publications

The effects of housing price on the mortgage debt in Malaysia: new evidence from FMOLS method

The effects of housing price on the mortgage debt in Malaysia: new evidence from FMOLS method

Short-Run and Long-Run Relationship of Islamic Home Financing in Malaysia: Analysis on Islamic Banks

The effect of credit composition on entrepreneurship

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