Empirical examination of macro-economic factors on credit risk determinant of commercial banks in Jordan.

The high volume of risks facing banks is one of the most important reasons behind their failure. After the financial crisis of 2008, the concern toward credit risk management took a new level. The credit risk management behavior and decisions tend to increase the credit risk level. Consequently, app...

Full description

Saved in:

Bibliographic Details
Main Author:	Alrfai, Mohammad Motasem Sayel
Format:	Thesis
Language:	eng eng eng
Published:	2022
Subjects:	HB Economic Theory HD61 Risk Management HG Finance
Online Access:	https://etd.uum.edu.my/10733/1/permission%20to%20deposit-embargo%2024%20months-s903886.pdf https://etd.uum.edu.my/10733/2/s903886_01.pdf https://etd.uum.edu.my/10733/3/s903886_02.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-uum-etd.10733
record_format	uketd_dc
spelling	my-uum-etd.107332023-11-26T02:11:40Z Empirical examination of macro-economic factors on credit risk determinant of commercial banks in Jordan. 2022 Alrfai, Mohammad Motasem Sayel Salleh, Danilah Waemustafa, Waeibrorheem College of Business (COB) College of Business HB Economic Theory HD61 Risk Management HG Finance The high volume of risks facing banks is one of the most important reasons behind their failure. After the financial crisis of 2008, the concern toward credit risk management took a new level. The credit risk management behavior and decisions tend to increase the credit risk level. Consequently, appropriate amount of information may enhance the management perception about the effect of some factors on credit risk. The relationship between macroeconomic factors and credit risk increased incredibly especially after the financial crisis. So, it is important to understand the mechanism of macroeconomic factors and how they relate to the management behaviour to decrease credit risk. This study investigated the existence of a relationship between some of the macroeconomic factors as independent variables and the bank’s credit risk in Jordan. The dependent variable is credit risk, which is measured by the non-performing loans (NPL) to total loans ratio. This research used three theories including financial acceleration theory, agency theory, and information asymmetry theory. The sample of the study is 16 Jordanian banks listed on the Amman stock exchange from 2008 to 2019. To test the hypotheses of the current study, a random effect model using STATA software was employed. The result showed that foreign direct investment (FDI) and the output gap affected credit risk significantly and negatively. The result specified that as remittance (REMIT) grows, credit risk considerably accelerated, and the same effect was also recognised for public debt (DEBT). The outcomes revealed an important influence of tax on personal income (TAXINC). The findings of the current study have implications for investors, regulators, and market participants by affording a considerable indication that the macroeconomic factors are related to credit risk and thus, can explain the phenomenon of NPLs. 2022 Thesis https://etd.uum.edu.my/10733/ https://etd.uum.edu.my/10733/1/permission%20to%20deposit-embargo%2024%20months-s903886.pdf text eng 2025-01-01 staffonly https://etd.uum.edu.my/10733/2/s903886_01.pdf text eng 2025-01-01 staffonly https://etd.uum.edu.my/10733/3/s903886_02.pdf text eng public other doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng eng
advisor	Salleh, Danilah Waemustafa, Waeibrorheem
topic	HB Economic Theory HD61 Risk Management HG Finance
spellingShingle	HB Economic Theory HD61 Risk Management HG Finance Alrfai, Mohammad Motasem Sayel Empirical examination of macro-economic factors on credit risk determinant of commercial banks in Jordan.
description	The high volume of risks facing banks is one of the most important reasons behind their failure. After the financial crisis of 2008, the concern toward credit risk management took a new level. The credit risk management behavior and decisions tend to increase the credit risk level. Consequently, appropriate amount of information may enhance the management perception about the effect of some factors on credit risk. The relationship between macroeconomic factors and credit risk increased incredibly especially after the financial crisis. So, it is important to understand the mechanism of macroeconomic factors and how they relate to the management behaviour to decrease credit risk. This study investigated the existence of a relationship between some of the macroeconomic factors as independent variables and the bank’s credit risk in Jordan. The dependent variable is credit risk, which is measured by the non-performing loans (NPL) to total loans ratio. This research used three theories including financial acceleration theory, agency theory, and information asymmetry theory. The sample of the study is 16 Jordanian banks listed on the Amman stock exchange from 2008 to 2019. To test the hypotheses of the current study, a random effect model using STATA software was employed. The result showed that foreign direct investment (FDI) and the output gap affected credit risk significantly and negatively. The result specified that as remittance (REMIT) grows, credit risk considerably accelerated, and the same effect was also recognised for public debt (DEBT). The outcomes revealed an important influence of tax on personal income (TAXINC). The findings of the current study have implications for investors, regulators, and market participants by affording a considerable indication that the macroeconomic factors are related to credit risk and thus, can explain the phenomenon of NPLs.
format	Thesis
qualification_name	other
qualification_level	Doctorate
author	Alrfai, Mohammad Motasem Sayel
author_facet	Alrfai, Mohammad Motasem Sayel
author_sort	Alrfai, Mohammad Motasem Sayel
title	Empirical examination of macro-economic factors on credit risk determinant of commercial banks in Jordan.
title_short	Empirical examination of macro-economic factors on credit risk determinant of commercial banks in Jordan.
title_full	Empirical examination of macro-economic factors on credit risk determinant of commercial banks in Jordan.
title_fullStr	Empirical examination of macro-economic factors on credit risk determinant of commercial banks in Jordan.
title_full_unstemmed	Empirical examination of macro-economic factors on credit risk determinant of commercial banks in Jordan.
title_sort	empirical examination of macro-economic factors on credit risk determinant of commercial banks in jordan.
granting_institution	Universiti Utara Malaysia
granting_department	College of Business (COB)
publishDate	2022
url	https://etd.uum.edu.my/10733/1/permission%20to%20deposit-embargo%2024%20months-s903886.pdf https://etd.uum.edu.my/10733/2/s903886_01.pdf https://etd.uum.edu.my/10733/3/s903886_02.pdf
_version_	1783729419325538304

Empirical examination of macro-economic factors on credit risk determinant of commercial banks in Jordan.

Similar Items