Year: 2025
Type: article
Abstract: This study investigates the impact of COVID-19 on bank borrowers across 22 Arab economies from 2017 to 2022, employing the two-step system GMM estimator. The findings reveal a significant negative effect of COVID-19 on the number of bank borrowers, highlighting a sharp decline in borrowing activity due to the pandemic’s economic disruptions. Notably, the decline was more pronounced in non-GCC countries, where economic structures and pandemic responses differed. Robustness tests, including subsample analysis and alternative econometric models (pooled OLS, fixed effects, random effects, and 2SLS), consistently confirm these results. The study emphasizes the need for targeted policy interventions to stabilize financial systems, reduce borrowing costs, and control exchange rate fluctuations to maintain credit access during crises. The findings provide crucial insights for policymakers aiming to support economic recovery and strengthen the resilience of the banking sector in the face of future external shocks.
Source: Financial Economics Letters
DOI: 10.58567/fel04010001
Author: Turki Rashed Alshammari
Institution: University of Hafr Al-Batin
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4407347536