INVESTIGATING THE INFLUENCE OF THE SHADOW ECONOMY ON NON-PERFORMING LOANS IN EUROPEAN ECONOMIES: A PANEL GMM ANALYSIS
In this paper, we use panel data containing all EU27 countries from the 2010 to 2022 period to investigate the impact exhibited by the shadow economy on the level of NPLs. Based on a Panel GMM approach we reveal a negative connection, indicating that Countries with larger informal sectors often...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
“Victor Slăvescu” Centre for Financial and Monetary Research
2023-12-01
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| Series: | Financial Studies |
| Subjects: | |
| Online Access: | http://fs.icfm.ro/Paper.03.FS4.2023.pdf |
| _version_ | 1797338764688752640 |
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| author | Cosmin Octavian CEPOI Bogdan Andrei DUMITRESCU Ionel LEONIDA |
| author_facet | Cosmin Octavian CEPOI Bogdan Andrei DUMITRESCU Ionel LEONIDA |
| author_sort | Cosmin Octavian CEPOI |
| collection | DOAJ |
| description | In this paper, we use panel data containing all EU27 countries from the 2010 to 2022 period to investigate the impact exhibited by the shadow economy on the level of NPLs. Based on a Panel GMM
approach we reveal a negative connection, indicating that Countries
with larger informal sectors often exhibit lower reported NPLs, possibly due to less stringent oversight. Additionally, economic growth correlates negatively with NPLs, while rising unemployment is
associated with increased NPL levels. However, factors like inflation,
political stability, and government debt did not show significant
correlations with NPLs in our analysis. The topic holds significant
relevance for both macro-stability policymakers and commercial banks aiming to understand how changes in fiscal and budgetary conditions impact the quality of credit portfolios. |
| first_indexed | 2024-03-08T09:36:01Z |
| format | Article |
| id | doaj.art-99dc492f1c274bea9dd0b31562b3dfd4 |
| institution | Directory Open Access Journal |
| issn | 2066-6071 |
| language | English |
| last_indexed | 2024-03-08T09:36:01Z |
| publishDate | 2023-12-01 |
| publisher | “Victor Slăvescu” Centre for Financial and Monetary Research |
| record_format | Article |
| series | Financial Studies |
| spelling | doaj.art-99dc492f1c274bea9dd0b31562b3dfd42024-01-30T09:17:15Zeng“Victor Slăvescu” Centre for Financial and Monetary ResearchFinancial Studies2066-60712023-12-012744659INVESTIGATING THE INFLUENCE OF THE SHADOW ECONOMY ON NON-PERFORMING LOANS IN EUROPEAN ECONOMIES: A PANEL GMM ANALYSISCosmin Octavian CEPOI0Bogdan Andrei DUMITRESCU1Ionel LEONIDA2 “Victor Slăvescu” Centre for Financial and Monetary Research, Romanian Academy, Buchares“Victor Slăvescu” Centre for Financial and Monetary Research, Romanian Academy, Bucharest“Victor Slăvescu” Centre for Financial and Monetary Research, Romanian Academy, BucharestIn this paper, we use panel data containing all EU27 countries from the 2010 to 2022 period to investigate the impact exhibited by the shadow economy on the level of NPLs. Based on a Panel GMM approach we reveal a negative connection, indicating that Countries with larger informal sectors often exhibit lower reported NPLs, possibly due to less stringent oversight. Additionally, economic growth correlates negatively with NPLs, while rising unemployment is associated with increased NPL levels. However, factors like inflation, political stability, and government debt did not show significant correlations with NPLs in our analysis. The topic holds significant relevance for both macro-stability policymakers and commercial banks aiming to understand how changes in fiscal and budgetary conditions impact the quality of credit portfolios.http://fs.icfm.ro/Paper.03.FS4.2023.pdfcredit portfolio qualityinflationpolitical stabilityinformal economydifference gmm |
| spellingShingle | Cosmin Octavian CEPOI Bogdan Andrei DUMITRESCU Ionel LEONIDA INVESTIGATING THE INFLUENCE OF THE SHADOW ECONOMY ON NON-PERFORMING LOANS IN EUROPEAN ECONOMIES: A PANEL GMM ANALYSIS Financial Studies credit portfolio quality inflation political stability informal economy difference gmm |
| title | INVESTIGATING THE INFLUENCE OF THE SHADOW ECONOMY ON NON-PERFORMING LOANS IN EUROPEAN ECONOMIES: A PANEL GMM ANALYSIS |
| title_full | INVESTIGATING THE INFLUENCE OF THE SHADOW ECONOMY ON NON-PERFORMING LOANS IN EUROPEAN ECONOMIES: A PANEL GMM ANALYSIS |
| title_fullStr | INVESTIGATING THE INFLUENCE OF THE SHADOW ECONOMY ON NON-PERFORMING LOANS IN EUROPEAN ECONOMIES: A PANEL GMM ANALYSIS |
| title_full_unstemmed | INVESTIGATING THE INFLUENCE OF THE SHADOW ECONOMY ON NON-PERFORMING LOANS IN EUROPEAN ECONOMIES: A PANEL GMM ANALYSIS |
| title_short | INVESTIGATING THE INFLUENCE OF THE SHADOW ECONOMY ON NON-PERFORMING LOANS IN EUROPEAN ECONOMIES: A PANEL GMM ANALYSIS |
| title_sort | investigating the influence of the shadow economy on non performing loans in european economies a panel gmm analysis |
| topic | credit portfolio quality inflation political stability informal economy difference gmm |
| url | http://fs.icfm.ro/Paper.03.FS4.2023.pdf |
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