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Private sector financing: linear and quadratic effects of domestic public debt on bank credit supply

Author

Listed:
  • Sana Zouari

    (University Côte d'Azur, INSTAR, France - University of Sfax, LED, Tunisia)

  • Dhafer Saidane

    (SKEMA Business School - University Côte d'Azur, France)

  • Foued Badr Gabsi

    (Faculty of Economics and Management of Sfax, University of Sfax, Tunisia)

Abstract

This paper investigates the impact of domestic public debt on credit supply to the private sector using a panel of 19 banks operating in the Arab Maghreb region over the period 2005-2018. The results confirm the existence of both linear and quadratic effects of domestic public debt on credit supply to the private sector. The estimated threshold found to be around 9.77 % of total assets. The regression results are robust across two alternative specifications excluding public banks and taking into consideration the impact of the Arab Spring on credit supply to the private sector for different levels of domestic public debt.

Suggested Citation

  • Sana Zouari & Dhafer Saidane & Foued Badr Gabsi, 2022. "Private sector financing: linear and quadratic effects of domestic public debt on bank credit supply," Economics Bulletin, AccessEcon, vol. 42(2), pages 372-387.
    • Handle: RePEc:ebl:ecbull:eb-20-00892
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    File URL: http://www.accessecon.com/Pubs/EB/2022/Volume42/EB-22-V42-I2-P34.pdf
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    More about this item

    Keywords

    Credit supply; Domestic public debt; Threshold; Non-linear dynamic panel;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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