Citation

Tan, Hui Ying and Tang, Tuck Cheong (2023) Macroeconomic Determinants of Non-Performing Loans in Malaysia. International Journal of Management, Finance and Accounting, 4 (2). pp. 116-138. ISSN 2735-1009

Text (Macroeconomic Determinants of Non-Performing Loans in Malaysia) 387 - Published Version Restricted to Repository staff only Download (3kB)

Abstract

This study re-examines the macroeconomic variables those explaining the outstanding balance of non-performing loans (NPL) in Malaysia, namely interest rate, unemployment rate, output, and price level. It covers 11 financing sectors between commercial and Islamic banks, for examples, primary agriculture, electricity, gas and water supply, manufacturing, household sectors, and so on. The data covers monthly observations for the period 2019-2021. Given non-stationarity property in nature for the variables, the ordinary least square (OLS) estimator applies for the first-differenced variables. The empirical results show that higher output reduces overall NPL including of Islamic banks but is inelastic. The past NPL explains the recent outstanding balance. The macroeconomic variables explain the most for primary agriculture, construction, mining & quarrying, transport, storage & communication, and other sector. This study also provides some relevant policy implications.

Item Type:	Article
Uncontrolled Keywords:	Banking Sector, Non-performing Loan, Interest Rates, Malaysia
Subjects:	H Social Sciences > HG Finance > HG3810-4000 Foreign exchange. International finance. International monetary system
Divisions:	Others
Depositing User:	Mr. MUHAMMAD AZRUL MOSRI
Date Deposited:	19 Aug 2024 06:28
Last Modified:	19 Aug 2024 06:28
URII:	http://shdl.mmu.edu.my/id/eprint/12816

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