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Foreign entry and the Turkish banking system in 2000s

Author

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  • Süer, Ömür
  • Levent, Haluk
  • Şen, Süleyman

Abstract

In recent decades, the role of foreign ownership in banking sectors, and especially the developing ones has become a frequently investigated topic among finance scholars. Similar to many other developing countries seeking to attract foreign direct investments, Turkey has experienced a great increase in the number of foreign-owned banks in the sector following the 2000 and 2001 economic and financial crises. Using panel data regression analysis for a sample of 31 deposit banks operating in Turkey, for the period 2002–2012, we find that foreign ownership has a negative and statistically significant impact on accounting profits, proxied by the ratio of earnings before taxes to total assets. However, contrary to expectations, three other dependent variables representing interest rate spreads, non-lending activities and short term risk, were not found to be significantly associated with foreign ownership.

Suggested Citation

  • Süer, Ömür & Levent, Haluk & Şen, Süleyman, 2016. "Foreign entry and the Turkish banking system in 2000s," The North American Journal of Economics and Finance, Elsevier, vol. 37(C), pages 420-435.
    • Handle: RePEc:eee:ecofin:v:37:y:2016:i:c:p:420-435
    DOI: 10.1016/j.najef.2016.03.003
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    Cited by:

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    2. Khan, Habib Hussain & Kutan, Ali M. & Naz, Iram & Qureshi, Fiza, 2017. "Efficiency, growth and market power in the banking industry: New approach to efficient structure hypothesis," The North American Journal of Economics and Finance, Elsevier, vol. 42(C), pages 531-545.
    3. Ee, Mong Shan & Chao, Chi-Chur & Wang, Leonard F.S. & Yu, Eden S.H., 2018. "Environmental corporate social responsibility, firm dynamics and wage inequality," International Review of Economics & Finance, Elsevier, vol. 56(C), pages 63-74.
    4. Alexakis, Christos & Izzeldin, Marwan & Johnes, Jill & Pappas, Vasileios, 2019. "Performance and productivity in Islamic and conventional banks: Evidence from the global financial crisis," Economic Modelling, Elsevier, vol. 79(C), pages 1-14.
    5. Muhammad Suhail Rizwan & Muhammad Moinuddin & Barbara L’Huillier & Dawood Ashraf, 2018. "Does a one-size-fits-all approach to financial regulations alleviate default risk? The case of dual banking systems," Journal of Regulatory Economics, Springer, vol. 53(1), pages 37-74, February.
    6. Han, I & Liang, Hsin-Yu & Chan, Kam C., 2016. "Locational concentration and institutional diversification: Evidence from foreign direct investments in the banking industry," The North American Journal of Economics and Finance, Elsevier, vol. 38(C), pages 185-199.

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    More about this item

    Keywords

    Banking; Foreign ownership; Emerging markets;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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