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The Effect of Sectoral Bank Loans on Economic Growth in Turkey

Author

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  • Tacinur Akca

    (Ordu University, Ünye Faculty of Economics and Administrative Sciences, Department of Economics, Ordu, Turkiye)

Abstract

In this study the effect of the loans extended by banks on the growth of the sector on a sectoral basis in the quarter of 2004Q1 and 2021Q2 in Turkey has been examined. The variables used as data in the study are real loans extended by banks to the construction, food, metal, personal loans, textile, transportation and wholesale retail sectors. The VAR method, the Johansen cointegration test and the Engle-Granger causality test were used as methods while performing the analysis. While analyzing whether the loans extended by banks to various sectors have a long-term relationship with growth with the Johansen cointegration test, the direction of these relations was determined with the Engle-Granger Causality test. Finally, the effect of shocks in sectoral loans on economic growth was evaluated by using impulse-response functions. The variables used were obtained from the CBRT (Banks Association of Turkey Risk Center). According to the Johansen cointegration test results, it was determined that there is cointegration between the data in the long term. According to the Engle-Granger test results, at the 10% significance level, there is a one-way causality relationship from GDP to transportation, personal loans and construction in the long run and there is a unidirectional causality relationship in the long run from the metal sector to GDP.

Suggested Citation

  • Tacinur Akca, 2022. "The Effect of Sectoral Bank Loans on Economic Growth in Turkey," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 72(72-1), pages 157-173, June.
    • Handle: RePEc:ist:journl:v:72:y:2022:i:1:p:157-173
    DOI: 10.26650/ISTJECON2021-1021608
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    References listed on IDEAS

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    1. Sunday Osaretin Iyare & Troy Lorde & Brian Francis, 2005. "Financial development and economic growth in developing economies: empirical evidence from the Caribbean," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 8(2), pages 168-184, Winter.
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    More about this item

    Keywords

    Sectoral loans; Economic growth; Bank loans; Johansen cointegration test; Engle-Granger casuality analysis JEL Classification: E51 ; O47 ; C32;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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