The Impact of Commodity Price Shocks on Banking System Stability in Developing Countries
This study examines the impact of commodity price shocks on the banking sector stability of 18 African commodity-exporting economies using an unbalanced panel dataset spanning a 16-year period from 2000–2015. The study on the impact of commodity price shocks on African commodity-exporting economies’...
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MDPI AG
2022-04-01
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Online Access: | https://www.mdpi.com/2227-7099/10/4/91 |
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author | Nicholas Ngepah Margarida Liandra Andrade da Silva Charles Shaaba Saba |
author_facet | Nicholas Ngepah Margarida Liandra Andrade da Silva Charles Shaaba Saba |
author_sort | Nicholas Ngepah |
collection | DOAJ |
description | This study examines the impact of commodity price shocks on the banking sector stability of 18 African commodity-exporting economies using an unbalanced panel dataset spanning a 16-year period from 2000–2015. The study on the impact of commodity price shocks on African commodity-exporting economies’ banking sectors was estimated using a panel fixed effects model. The empirical findings indicate that commodity price shocks increase bank credit risk (non-performing loans) and, thus, pose a risk to the banking sector stability of African commodity-exporting economies. The results for the disaggregated shocks reveal that both positive and negative shocks weaken banking sector stability. In addition, commodity price shocks are discovered to decrease credit extension to the private sector, highlighting an additional channel through which the impact of commodity price shocks may be perpetuated to the real economy. |
first_indexed | 2024-03-09T10:55:29Z |
format | Article |
id | doaj.art-9a47cff5b1e74810b9d98ab6bead908d |
institution | Directory Open Access Journal |
issn | 2227-7099 |
language | English |
last_indexed | 2024-03-09T10:55:29Z |
publishDate | 2022-04-01 |
publisher | MDPI AG |
record_format | Article |
series | Economies |
spelling | doaj.art-9a47cff5b1e74810b9d98ab6bead908d2023-12-01T01:39:30ZengMDPI AGEconomies2227-70992022-04-011049110.3390/economies10040091The Impact of Commodity Price Shocks on Banking System Stability in Developing CountriesNicholas Ngepah0Margarida Liandra Andrade da Silva1Charles Shaaba Saba2Auckland Park Kingsway Campus, University of Johannesburg, Johannesburg 2006, South AfricaAuckland Park Kingsway Campus, University of Johannesburg, Johannesburg 2006, South AfricaAuckland Park Kingsway Campus, University of Johannesburg, Johannesburg 2006, South AfricaThis study examines the impact of commodity price shocks on the banking sector stability of 18 African commodity-exporting economies using an unbalanced panel dataset spanning a 16-year period from 2000–2015. The study on the impact of commodity price shocks on African commodity-exporting economies’ banking sectors was estimated using a panel fixed effects model. The empirical findings indicate that commodity price shocks increase bank credit risk (non-performing loans) and, thus, pose a risk to the banking sector stability of African commodity-exporting economies. The results for the disaggregated shocks reveal that both positive and negative shocks weaken banking sector stability. In addition, commodity price shocks are discovered to decrease credit extension to the private sector, highlighting an additional channel through which the impact of commodity price shocks may be perpetuated to the real economy.https://www.mdpi.com/2227-7099/10/4/91commodity price shocksbanking sector stabilitypanel dataAfrica |
spellingShingle | Nicholas Ngepah Margarida Liandra Andrade da Silva Charles Shaaba Saba The Impact of Commodity Price Shocks on Banking System Stability in Developing Countries Economies commodity price shocks banking sector stability panel data Africa |
title | The Impact of Commodity Price Shocks on Banking System Stability in Developing Countries |
title_full | The Impact of Commodity Price Shocks on Banking System Stability in Developing Countries |
title_fullStr | The Impact of Commodity Price Shocks on Banking System Stability in Developing Countries |
title_full_unstemmed | The Impact of Commodity Price Shocks on Banking System Stability in Developing Countries |
title_short | The Impact of Commodity Price Shocks on Banking System Stability in Developing Countries |
title_sort | impact of commodity price shocks on banking system stability in developing countries |
topic | commodity price shocks banking sector stability panel data Africa |
url | https://www.mdpi.com/2227-7099/10/4/91 |
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