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The Research Of Profitability Persistence In Turkish Banking Sector

Author

Listed:
  • Alper Aslan
  • Omer Iskenderoglu

    (Nevsehir University
    Nigde University)

Abstract

It’s expected that the increasing competition will influence the firms on many ways. Under the competitive environment, firm’s abnormal profits will erode. On this context, profitability of competing firms will not be persistent in the long run and therefore decrease. The hypothesis which proposes that, under competition conditions the profits over the norms will decrease has been tested on many empirical studies. In this study Persistence of Profitability (PP) is researched by Return on Assets (ROA) data on a panel model for 25 surviving Turkish banks for the period 1998 – 2009, by Seemingly Unrelated Regression (SUR) and MADF (Multivariate Augmented Dickey Fuller) tests. The results indicate that the competition affects the profitability and profitability is not persistent in Turkish banks.

Suggested Citation

  • Alper Aslan & Omer Iskenderoglu, 2012. "The Research Of Profitability Persistence In Turkish Banking Sector," Anadolu University Journal of Social Sciences, Anadolu University, vol. 12(2), pages 59-68, June.
    • Handle: RePEc:and:journl:v:12:y:2012:i:2:p:59-68
    as

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    File URL: http://www.anadolu.edu.tr/arastirma/hakemli_dergiler/sosyal_bilimler/pdf/2012_2/2012-02-01.pdf
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    More about this item

    Keywords

    Competition; Persistence of profit; Turkish Banking System; SUR; MADF.;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G2 - Financial Economics - - Financial Institutions and Services

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