Market Disciplining Role of Crisis on the Restructuring of the Turkish Banking Sector
AbstractThis paper aims to find the productivity change in the banking sector between 1990 and 2006, with an emphasis to the period after 2001 crisis during which the Turkish banking system experienced a structural change. Using DEA, we find the Malmquist TFP Change Index and its mutually exclusive and exhaustive components of efficiency and technological changes over time. Additionally, we further decompose the technical efficiency change into pure technical and scale efficiency changes. The productivity of the banking sector is found out to have increased, the main reason being technological improvement rather than efficiency increase. For the cases of productivity decline, however, the changes come from the efficiency side rather than technology. An analysis with respect to the ownership status revealed that foreign banks were the most efficient group until 2001 after which state banks captured the first place. We attribute this change to the inflation accounting practice as well as better management of state banks with less political intrusion. The analysis with respect to bank size reveals that before 2000, the most efficient bank group was the medium-scale banks (the banks mainly purchased by foreign banks) followed by small banks while the efficiency scores converged after 2001.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 5492.
Date of creation: 2007
Date of revision:
Turkish Banking Sector; Data Envelopment Analysis; Efficiency; Productivity; Post-Crises Period;
Other versions of this item:
- Ahmet Faruk Aysan & Sanli Pinar Ceyhan, 2007. "Market Disciplining Role of Crises on The Restructuring of the Turkish Banking Sector," Working Papers 2007/18, Bogazici University, Department of Economics.
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-03 (All new papers)
- NEP-BAN-2007-11-03 (Banking)
- NEP-CWA-2007-11-03 (Central & Western Asia)
- NEP-EFF-2007-11-03 (Efficiency & Productivity)
- NEP-MAC-2007-11-03 (Macroeconomics)
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