Investigation the Long Run and Short Run Impact of Banking and Economic Factors on Public Bank's None-Performing Loan

Banking system has been faced recently by none-performing Loan in Iran and it has many consequences such as lack of liquidity and reduction in the volumes of credit in Iran’s banking system. This study investigates the impact of banking and economic factors affecting on none-performing Loan in seven public banks in the framework of dynamic panel data model with using one-step generalized method of moment(GMM) estimator during the time period of 1380 until 1393 based on the importance role of none-performing Loan in the banking system. The results indicate that economic variables (economic growth, inflation rate, real interest rate and public debts) have a significant role in explaining long run and short run changes in public bank’s None-performing Loan, whereas management and efficiency among bank’s factors have a significant role in explaining changes in public bank’s None-performing Loan. Based on the results, changes in public bank’s None-performing Loan compare with economic and banking factors, are more sensitive to economic condition.