Do Bank Loans Trigger Imports? An Empirical Analysis for MIST Countries

This paper seeks to investigate the effect of bank loans, economic growth, and exchange rate on imports over the period 1980–2020 for MIST countries (Mexico, Indonesia, South Korea, and Türkiye), using Common Correlated Effect Mean Group (CCEMG) and Augmented Mean Group (AMG) estimators. In addition, the causality linkage between the variables was examined through the Dumitrescu and Hurlin test. The findings showed that bank loans, economic growth, and the exchange rate have a positive and significant effect on imports for the whole panel. According to the AMG estimator, an increase in bank loans leads to an increase in imports, excluding Indonesia. Moreover, the causality test indicated that there is a unidirectional linkage from bank loans to imports. Besides, a bidirectional linkage between economic growth and imports was found.