<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This paper aims to evaluate the factors determining countries’ private credit level as well as to identify the differences of their effect during the periods when the levels of country private credit exceeded 100 percent of GDP or were below. The research methodology relies on two modifications of the multiple regression model with log differences of variables. Research results showed a negative impact of economic growth and a positive impact of consumer prices and housing prices on the level of private credit. It has also been found that in the first period when the level of private credit to GDP exceeds the 100 per cent threshold households tend to borrow more than in other periods. In the second model distinguishing between periods when the level of country’s private credit was below 100 per cent of GDP and when this level was reached or exceeded the research showed that the effects of economic growth do not differ between periods of high and low indebtedness, but the difference becomes apparent when assessing the impact of household income and expenditure, thus confirming the impact of the marginal financial depth.</p>
</abstract>

This paper aims to evaluate the factors determining countries’ private credit level as well as to identify the differences of their effect during the periods when the levels of country private credit exceeded 100 percent of GDP or were below. The research methodology relies on two modifications of the multiple regression model with log differences of variables. Research results showed a negative impact of economic growth and a positive impact of consumer prices and housing prices on the level of private credit. It has also been found that in the first period when the level of private credit to GDP exceeds the 100 per cent threshold households tend to borrow more than in other periods. In the second model distinguishing between periods when the level of country’s private credit was below 100 per cent of GDP and when this level was reached or exceeded the research showed that the effects of economic growth do not differ between periods of high and low indebtedness, but the difference becomes apparent when assessing the impact of household income and expenditure, thus confirming the impact of the marginal financial depth.

Assessment of Factors Determining the Level of Private Credit in European Union Countries

kristina.matuzeviciute-balciuniene@sa.vu.lt

Management of Organizations: Systematic Research

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

This paper aims to evaluate the factors determining countries’ private credit level as well as to identify the differences of their effect during the periods...

Assessment of Factors Determining the Level of Private Credit in European Union Countries

Data publikacji: 18 paź 2022

Zakres stron: 67 - 82

Otrzymano: 30 kwi 2022

Przyjęty: 10 sie 2022

DOI: https://doi.org/10.2478/mosr-2022-0004

Słowa kluczowe
level of private credit, high indebtedness, household income/expenditure, threshold

© 2022 Lina Garšvienė et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Assessment of Factors Determining the Level of Private Credit in European Union Countries

Data publikacji: 18 paź 2022

Zakres stron: 67 - 82

Otrzymano: 30 kwi 2022

Przyjęty: 10 sie 2022

DOI: https://doi.org/10.2478/mosr-2022-0004

Słowa kluczowelevel of private credit, high indebtedness, household income/expenditure, threshold

© 2022 Lina Garšvienė et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Słowa kluczowe
level of private credit, high indebtedness, household income/expenditure, threshold