THE INFLUENCE OF MACROECONOMIC FACTORS ON NON-PERFORMING LOANS IN THE COUNTRIES OF THE WESTERN BALKANS

SALIHI, Sindise and MUAREMI, Lindita and EJUPI, Elsana and EMINI, Edrina (2023) THE INFLUENCE OF MACROECONOMIC FACTORS ON NON-PERFORMING LOANS IN THE COUNTRIES OF THE WESTERN BALKANS. ECONOMIC VISION International Scientific Journal in Economics, Finance, Business, Marketing, Management and Tourism, 10 (19-20). pp. 174-180. ISSN 2545-4544

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Abstract

The banking system of the Western Balkan countries (WBC hereafter) has undergone great development on the grounds of lending activities, where the issues of non-performing loans, as a crucial activity of the banking sector reached its peak, especially during the COVID-19 period. This paper analyzes the state of non-performing loans, and the reasons for the increase in the level of nonperforming loans in the banking system of the Western Balkan countries, by relying on a panel data set of the WBC 6, (Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Montenegro, and Serbia), covering in principle the yearly period 2000 - 2019. The empirical assessment focuses on the relationship between the non-performing loans as a dependent variable and a set of macroeconomic explanatory variables such are GDP, unemployment rate, inflation rate, and interest rate, using the postestimation results of Hausman Taylor econometric technique, suggested by the testing procedure of the panel data. The findings of the study suggest the agglomeration effect of non-performing loans due to the significant lagged dependent variable and the enhancement effect of non-performing loans driven by unemployment and interest rates.

Item Type:	Article
Uncontrolled Keywords:	Banking system, problematic loans, GDP, unemployment rate, inflation rate
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HC Economic History and Conditions
Divisions:	Faculty of Law, Arts and Social Sciences > School of Management
Depositing User:	Unnamed user with email zshi@unite.edu.mk
Date Deposited:	10 Nov 2023 16:36
Last Modified:	10 Nov 2023 16:36
URI:	http://eprints.unite.edu.mk/id/eprint/1586

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