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Corporate Sector Financial Structure in Turkey : A Descriptive Analysis

Author

Listed:
  • Halil Ibrahim Aydin
  • Cafer Kaplan
  • Mehtap Kesriyeli
  • Erdal Ozmen
  • Cihan Yalcin
  • Serkan Yigit

Abstract

This paper presents and discusses some stylised facts of the corporate sector financial structure in Turkey using the Company Sector Accounts compiled by the Central Bank of the Republic of Turkey (CBRT). The findings of the paper suggest that non-financial firms in Turkey have been heavily exposed almost all of the basic balance sheet risks. The corporate sector appears to be excessively leveraged with relatively lower asset tangibility creating also a credit risk for the lenders. The firms rely heavily on foreign currency denominated and short-term debt instruments making them vulnerable to both exchange rate and interest rate shocks through currency and maturity mismatches. The corporate sector can be characterised as financially constrained as the deepening of the Turkish bank-based financial system is rather low and the bank credits to the private sector tend to be crowded out by the mode of domestic debt finance. The corporate sector vulnerabilities to maturity, interest rate and currency risks are found to be improving with the firm size. With the relatively stable macroeconomic environment and stricter prudential regulation on the financial system, the corporate sector balance sheet risks, albeit still are at high levels, tend to be improving after the financial crisis of 2001.

Suggested Citation

  • Halil Ibrahim Aydin & Cafer Kaplan & Mehtap Kesriyeli & Erdal Ozmen & Cihan Yalcin & Serkan Yigit, 2006. "Corporate Sector Financial Structure in Turkey : A Descriptive Analysis," Working Papers 0607, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  • Handle: RePEc:tcb:wpaper:0607
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    File URL: http://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Publications/Research/Working+Paperss/2006/06-07
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    References listed on IDEAS

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    Cited by:

    1. Sevcan Yesiltas, 2009. "Financing Constraints and Investment: The Case of Turkish Manufacturing Firms," 2009 Meeting Papers 874, Society for Economic Dynamics.
    2. François-Xavier Bellocq & Yves Zlotowski, 2009. "Trois pays émergents dans la crise : Indonésie, Russie, Turquie," Revue d'Économie Financière, Programme National Persée, vol. 95(2), pages 243-258.
    3. repec:bis:bisifc:45-13 is not listed on IDEAS
    4. Bülent Köksal & Cüneyt Orman, 2015. "Determinants of capital structure: evidence from a major developing economy," Small Business Economics, Springer, vol. 44(2), pages 255-282, February.
    5. International Monetary Fund, 2016. "Turkey; Selected Issue," IMF Staff Country Reports 16/105, International Monetary Fund.
    6. Cafer Kaplan & Erdal Ozmen & Cihan Yalcin, 2006. "The Determinants and Implications of Financial Asset Holdings of Non-Financial Firms in Turkey : An Emprical Investigation," Working Papers 0606, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    7. Altan Aldan & Mahmut Gunay, 2008. "Entry to Export Markets and Productivity: Analysis of Matched Firms in Turkey," Working Papers 0805, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    8. Pinar Ozlu & Cihan Yalcin, 2010. "The Trade Credit Channel of Monetary Policy Transmission: Evidence from Non-Financial Firms in Turkey (Firma Ticari Borclari ve Kredi Aktarim Mekanizmasi: Turkiye Ornegi)," Working Papers 1016, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    9. Petya Koeva Brooks, 2007. "Does the Bank Lending Channel of Monetary Transmission Work in Turkey?," IMF Working Papers 07/272, International Monetary Fund.
    10. Ozgur Arslan-Ayaydin & Darold Barnum & Mehmet Baha Karan & Atilla Hakan Ozdemir, 2014. "How is Moral Hazard Related to Financing R&D and Innovations?," European Research Studies Journal, European Research Studies Journal, vol. 0(4), pages 111-131.

    More about this item

    Keywords

    Balance sheets; Capital structure; Corporate sector; Debt composition; Financial crowding-out; Liability dollarisation; Turkey;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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