What Determines the Banking Sector Performance in Globalized Financial Markets: The Case of Turkey?

Aysan, Ahmet Faruk and Ceyhan, Sanli Pinar (2007): What Determines the Banking Sector Performance in Globalized Financial Markets: The Case of Turkey?

Abstract

This study attempts to give an insight about the trend in the performance of the Turkish banking sector by conducting a panel data fixed effects regression analysis. The results reveal that efficiency change is negatively related to the number of branches. We find a positive relationship between loan ratio and the performance indices efficiency and efficiency change. Furthermore, bank capitalization is positively related to efficiency change. Interestingly however, return on equity is not statistically significant in explaining any of the efficiency measures. There is also no robust relationship between foreign ownership and efficiency. Finally, restructuring attempts in post-crises epoch robustly account for the improvement in efficiency scores in recent years.

• Item Type: MPRA Paper
• Language: English
• Keywords: Panel Data Analysis; Efficiency; Productivity; Turkish Commercial Banks; Foreign Ownership
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development

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