Determinants of Non-Performing Loans: A Panel Data Empirical Analysis for South European Countries
The paper analyzes the determinants of non-performing loans in 19 European banks in Portugal, Italy, Greece and Spain based on quarterly data between 2006–2018. We implement a panel data model with interactive effects, which accounts for unobserved heterogeneity and cross-sectional dependence. The estimation approach we employ uses an analytical and iterative bias correction based on the work of B
