Table 7.
Moderating role of bank size in the effects of liquidity creation and bank funding diversification on non-performing loans.
|
Independent variables |
NPL is the dependent variable (1) |
NPL is the dependent variable (2) |
||
|---|---|---|---|---|
| Coef. | Std Err. | Coef. | Std Err. | |
| lag.NPL | 0.1215*** | 0.0001 | 0.4415*** | 0.0469 |
| DUM*LC1 | −0.0396*** | 0.0078 | ||
| DUM*LC2 | −0.0277** | 0.0113 | ||
| DUM*BFD | 0.0456*** | 0.0038 | 0.0158*** | 0.0057 |
| LC1 | −0.0274* | 0.0157 | ||
| LC2 | −0.0131 | 0.0102 | ||
| BFD | 0.0591** | 0.0268 | 0.0241** | 0.0108 |
| ROA | 0.4454*** | 0.1127 | 0.4257*** | 0.1493 |
| CAP | −0.5268*** | 0.0240 | −0.0794*** | 0.0236 |
| LG | −0.0386*** | 0.0059 | 0.0017 | 0.0036 |
| INF | 0.2129*** | 0.0251 | 0.0735*** | 0.0158 |
| GDP | −0.8120*** | 0.1377 | −0.0683 | 0.0459 |
Note: Table 7 reports the regression results from the dynamic model (2) by using the LSDVC. We use a dummy (DUM) variable that represents large banks. DUM equals one if the bank scale is above the median size and otherwise. Interaction variables (DUM*LC and DUM*BFD) are created to estimate the moderating role of bank scale on the impact of liquidity creation (LC) and bank funding diversification (BFD) on non-performing loans (NPL). The LSDVC initialized by AB is bootstrapped by 50 iterations for the standard errors (Bun & Kiviet, 2003 and Bruno, 2005). ***, **, and * indicate significance levels at 1%, 5%, and 10%, respectively.