This thesis brings a new approach to research of non-performing loans (NPLs), stepping away from the traditional macroeconomic and bank-specific focused literature by exploring the relationship between NPLs and natural disasters across all 50 US states, aiming to understand to what extent and how natural disasters affect financial instability as reflected by NPLs. Using fixed effects models with Beck and Katz robust standard errors the study analyses annual state-level NPL-ratio, a measure of NPLs to total loan portfolio value with natural disasters measured as the number of disasters, cost of disasters, and deaths from disasters. Macroeconomic variables are included as controls, the included variables are by personal income, unemployment rate, and tax collection. The studied period is 1984 to 2019. Support for the notion that the NPL ratio is affected by natural disasters is found, however, the results are conflicting as the number of disasters is found to increase the NPL ratio according to the theoretical expectation, however, not when interactions are added to the model. Whilst, contrary to previous research the number of deaths from disasters is found to decrease the NPL ratio. The results are thus deemed ambiguous. However, the thesis contributes to the field by highlighting the need for further research into similar research questions and providing a new approach to NPLs in the US context.
| Identifer | oai:union.ndltd.org:UPSALLA1/oai:DiVA.org:su-230057 |
| Date | January 2024 |
| Creators | Fallenius, Jonas |
| Publisher | Stockholms universitet, Institutionen för ekonomisk historia och internationella relationer |
| Source Sets | DiVA Archive at Upsalla University |
| Language | English |
| Detected Language | English |
| Type | Student thesis, info:eu-repo/semantics/bachelorThesis, text |
| Format | application/pdf |
| Rights | info:eu-repo/semantics/openAccess |
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