Journal of Management and Business Solutions 3092-7226 In Press 2027 11 01 Determinants of Credit Risk in Iraqi Commercial Banks: A Dynamic Panel Data Approach (2010–2024) Determinants of Credit Risk in Iraqi Commercial Banks: A Dynamic Panel Data Approach (2010–2024) 1 21 EN Journal Article 2026 05 27 <p>This study aimed to identify the bank-specific, macroeconomic, and institutional determinants of credit risk in Iraqi commercial banks during 2010–2024 using a dynamic panel data framework. This quantitative longitudinal study analyzed panel data from 24 Iraqi commercial banks over the period 2010–2024. Credit risk was measured by the non-performing loan ratio. The explanatory variables included the lagged non-performing loan ratio, capital adequacy ratio, return on assets, oil price volatility, exchange rate volatility, and a governance indicator. After accounting for the lag structure, the dynamic estimation included 336 bank-year observations. The model was estimated using the two-step System Generalized Method of Moments estimator with robust standard errors to address unobserved heterogeneity, dynamic persistence, and potential endogeneity. Model adequacy was assessed using the Arellano–Bond tests for serial correlation, the Hansen J-test of overidentifying restrictions, the difference-in-Hansen test, and robustness checks based on alternative GMM specifications. The lagged non-performing loan ratio had a positive and significant effect on current credit risk (β = 0.638, p &lt; 0.001), confirming strong persistence in non-performing loans. Capital adequacy significantly reduced credit risk (β = -0.217, p = 0.003), while return on assets also had a significant negative effect (β = -0.384, p = 0.001). Oil price volatility significantly increased credit risk (β = 0.084, p = 0.007), as did exchange rate volatility (β = 0.173, p = 0.005). Improved governance conditions were associated with lower credit risk (β = -1.426, p = 0.021). The AR(2) test was non-significant (p = 0.441), and the Hansen J-test supported instrument validity (p = 0.552). Robustness analyses confirmed the stability of the coefficient signs and significance across alternative dynamic panel specifications. Credit risk in Iraqi commercial banks is persistent and jointly determined by internal financial strength and external macroeconomic and institutional conditions, indicating that stronger capitalization, profitability, governance, and effective management of oil-price and exchange-rate shocks are essential for reducing non-performing loans.</p> https://www.journalmbs.com/index.php/jmbs/article/download/426/387