The Impact of Foreign Direct Investment Inflows on Nonperforming Loans: The Case of UAE

Ozili, Peterson K; Salman, Asma; Ali, Qaisar

doi:10.2139/ssrn.3742785

Cited by 3 publications

(1 citation statement)

References 42 publications

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“…The results of previous research from Barus (2016) have investigated the factors that affect NPL where the results obtained are that NIM, BOPO, LDR, firm size and inflation together affect NPL. Meanwhile, Ozili et al (2020) mention other results where the NIM ratio has no effect on NPL. From the description of the theory and previous research, the author proposes a hypothesis:…”

Section: Effect Of Net Interest Margin On Non-performing Loansmentioning

confidence: 91%

Determinants of Non-Performing Bank Loans Listed on The Indonesia Stock Exchange For The 2016-2020 Period

Nugroho,

Endri

2022

jss

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This study aims to analyse the effect of BOPO, Loan to Deposit Ratio (LDR), Capital Adequacy Ratio (CAR), Net Interest Margin, Oil Price, inflation, and Interest Rate on Non-performing Loans (NPL) of banks listed on the Indonesia Stock Exchange during 2016-2020. The total population of banks listed on the IDX is 46 banks. In contrast, the sample in this study is part of the population, which is 32 banks. This study is quantitative, so the data analysis method used is a statistical method—the analysis of these data using Econometric Views (Eviews) software version 12.0. The results showed that BOPO has a positive and significant effect on bank NPLs, LDR has a positive but not significant effect on NPLs, CAR has a negative and significant effect on NPLs, NIM has a negative and significant effect on NPLs, Oil Price has a positive and significant effect on NPLs, inflation has a negative but not significant effect on NPLs, and Interest Rate has a positive and significant effect on NPLs. Banks must pay attention to the reference and rules of the regulator, the Financial Services Authority, as a guideline where the maximum limit for the NPL ratio is 5% so that the quality of banking credit can be maintained. Investors it is expected to be able to make considerations in investing by analyzing the company's condition through financial statements published by banks by looking at the ratio of Non-Performing Loans as a crucial consideration.

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Section: Effect Of Net Interest Margin On Non-performing Loansmentioning

confidence: 91%

Determinants of Non-Performing Bank Loans Listed on The Indonesia Stock Exchange For The 2016-2020 Period

Nugroho,

Endri

2022

jss

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The influence of foreign direct investment on banking stability in a dual banking system during the COVID-19 pandemic and the global financial crisis

Alzarooni,

Al-Shboul,

Maghyereh

2024

Borsa Istanbul Review

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The effect of foreign direct investment inflows on non-performing loans

Salko,

Mamo,

Mustaqe

2024

JGR

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Foreign direct investments (FDIs) are an important part of a country’s economic development and banks play a crucial role in terms of facilitating the FDI inflows. However, given that these inflows enable banks to increase the portion of loans, this increases the exposure to credit risk leading to potential increased non-performing loans (NPLs) (Ozili et al., 2021). This study aims to investigate this relationship in the Albanian economy during the period 2008–2022. Considering the rapid growth of FDIs in Albania in recent years and the importance that the banking sector plays, the purpose of this paper is to assess the impact of FDI inflows on NPLs in Albania while controlling for other relevant NPL determinants. Using an ordinary least squares (OLS) regression model, we find a significant and positive relationship between FDIs and NPLs in Albania. The findings reveal that higher FDI inflows, which are channeled through the banking sector in the economy, provide increased credit growth and therefore a potential deterioration in credit standards leading to higher NPLs in the economy. In addition, we find a significant relationship between financial intermediation indicators and NPLs implying that financial intermediation also plays an important role in controlling the level of NPLs in the Albanian economy.

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The Impact of Foreign Direct Investment Inflows on Nonperforming Loans: The Case of UAE

Cited by 3 publications

References 42 publications

Determinants of Non-Performing Bank Loans Listed on The Indonesia Stock Exchange For The 2016-2020 Period

Determinants of Non-Performing Bank Loans Listed on The Indonesia Stock Exchange For The 2016-2020 Period

The influence of foreign direct investment on banking stability in a dual banking system during the COVID-19 pandemic and the global financial crisis

The effect of foreign direct investment inflows on non-performing loans

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