The effect of market power on bank risk taking in Turkey

The aim of this paper is to understand the role of market power on the loan risk and overall bank risk measures for Turkish banks during 2001-2009. Testing for this question is particularly important for the Turkish banking system, which experienced an intense regulation process after 2000 leading to a significant decrease in the number of banks and thereby possibly reducing competition. The results of the study provide some evidence regarding the competition-stability hypothesis.competition, banking

Long Run Profit Maximization in the Turkish Manufacturing Sector

The purpose of this research is to investigate whether the long-run relationship implied by profit maximization is valid for the Turkish manufacturing industry for the period of 1950-2001. During this period, the Turkish economy has experienced important policy changes, for example the implementation of liberalization policies after the 1980s. Thus, the possible effects of economic policy implementations over the profit maximization in the Turkish manufacturing sector will also be studied by using advanced time series techniques such as the Zivot and Andrews (1992) unit root test and the Gregory and Hansen (1996) co-integration test. The results of the study show that rationalization mechanism does not appear to work in Turkey. Because most of the previous studies on this issue are concentrated in developed countries and also, there has been little research into the Turkish manufacturing sector, the contribution of this study is important.Long run equilibrium, co-integration, elasticity of substitution, structural breaks

Export Decisions of Firms and Financial Constraints

anemonFinancial constraints may prevent firms from continuing theiroperations which can hamper the economic growth. The aim of this paper is to examinethe effect of financial constraints on export decisions of firms. Thisrelationship is particularly important for emerging markets like Turkey whichare suffering from high current account deficits. The contribution of thisstudy stems from the dataset used, which is the widest dataset that is everused to test the relationship between export behaviour of firms and financialconstraints from a large range of economies. The data cover nearly 110000 firmsaround the world from 2002 to 2010. Our results imply a positive relationshipbetween financial constraints and export probabilities of firms. Moreover weobserve higher probability of exporting for firms if the economy does not havea developed financial system.Finansal kısıtlar, firmaların faaliyetlerine devam etmelerini engelleyerek ekonomik büyümeninönüne geçebilir. Bu yazının amacı, finansal kısıtların firmaların ihracatdavranışlarına etkisini incelemektir. Bu ilişki, özellikle yüksek cari açıkoranlarından muzdarip olan Türkiye gibi gelişen piyasa ekonomileri içinönemlidir. Bu çalışmanın katkısı, kullandığı veri setinden kaynaklanmakta olup, firmaların ihracat davranışları ve finansal kısıtlar arasındaki ilişkiyi testetmek için şimdiye dek kullanılmış olan en geniş veri seti üzerindenekonometrik analizler gerçekleştirilmiştir. Veriler, 2002'den 2010'a kadardünya çapında 110000 civarı firmayı kapsamaktadır. Sonuçlar, firmalarınfinansal kısıtlar ve firmaların ihracat olasılıkları arasında pozitif birilişki olduğunu gösterirken gelişmiş finansal sistemin sahip olmayan ülkelerde, firmaların ihracat olasılıklarının daha düşük olduğuna işaret etmektedir. 45267

Firmaların İhracat Kararları ve Finansal Kısıtlar

anemonFinancial constraints may prevent firms from continuing theiroperations which can hamper the economic growth. The aim of this paper is to examinethe effect of financial constraints on export decisions of firms. Thisrelationship is particularly important for emerging markets like Turkey whichare suffering from high current account deficits. The contribution of thisstudy stems from the dataset used, which is the widest dataset that is everused to test the relationship between export behaviour of firms and financialconstraints from a large range of economies. The data cover nearly 110000 firmsaround the world from 2002 to 2010. Our results imply a positive relationshipbetween financial constraints and export probabilities of firms. Moreover weobserve higher probability of exporting for firms if the economy does not havea developed financial system.Finansal kısıtlar, firmaların faaliyetlerine devam etmelerini engelleyerek ekonomik büyümeninönüne geçebilir. Bu yazının amacı, finansal kısıtların firmaların ihracatdavranışlarına etkisini incelemektir. Bu ilişki, özellikle yüksek cari açıkoranlarından muzdarip olan Türkiye gibi gelişen piyasa ekonomileri içinönemlidir. Bu çalışmanın katkısı, kullandığı veri setinden kaynaklanmakta olup, firmaların ihracat davranışları ve finansal kısıtlar arasındaki ilişkiyi testetmek için şimdiye dek kullanılmış olan en geniş veri seti üzerindenekonometrik analizler gerçekleştirilmiştir. Veriler, 2002'den 2010'a kadardünya çapında 110000 civarı firmayı kapsamaktadır. Sonuçlar, firmalarınfinansal kısıtlar ve firmaların ihracat olasılıkları arasında pozitif birilişki olduğunu gösterirken gelişmiş finansal sistemin sahip olmayan ülkelerde, firmaların ihracat olasılıklarının daha düşük olduğuna işaret etmektedir. 45267

A LITERATURE REVIEW FOR EXPERIMENTAL STUDIES OF BANK RUNS / Banka Hücumlarına İlişkin Deneysel Çalışmalara Ait Bir Literatür Taraması

With the bank runs experienced in different western countries during and after the 2007-2008 global financial crisis, bank run phenomena can be seen as the awakening of a ghost in financial markets, which is a definite call for research for the fundamental factors that derive bank runs. Prior to the global financial crisis there were only two experimental researches of bank runs. Parallel with the experimental methods being popular in finance and the latest global financial crisis, the number of papers in the field has risen sharply. This paper reviews the state of art for the experimental researches of bank runs. The results of the literature review indicate that some papers are approaching to the issue in a more individual level by taking into account psychological factors, while other papers are mostly interested in macro impacts of bank runs, such as contagion effects

Essays on Loan Markets in Less-Developed Economies

Financial constraints are one of the most important obstacles for businesses particularly in less–developed and developing economies. Collateral requirements are frequently addressed as one the most important obstacles to starting and running a business especially for small and medium enterprises (SMEs), in these countries. This thesis consists of four empirical papers each corresponding to a chapter on loan markets in less-developed economies. After the introduction chapter, the second chapter investigates both the presence of collateral and the collateral to loan ratios on loans extended to SMEs are examined. The informal credit mostly serves credit-constrained borrowers (mostly SMEs, poor households, informal businesses, borrowers in rural areas that are located far from formal creditors, and people who are not able to meet collateral requirements of formal creditors) in the formal financial markets. The third chapter aims to understand why and to what extend SMEs use informal credit from various sources, moneylenders and family/friends and suppliers/customers as forms of informal credit. The fourth chapter examines the financial constraints faced by female entrepreneurs. The primary data source in these second, third and fourth chapters is the Business Environment and Enterprise Performance Surveys which are mainly based on Eastern European and Central Asian countries. These surveys are joint projects of the European Bank for Reconstruction and Development and the World Bank. Chapter five of this thesis takes a different strand and focuses on the effect of banks’ market power on banks’ risk. The empirical analysis is based on data from Turkish banks and helps to shed light on the relation between market power and financial stability. Finally chapter six highlights the main conclusions and addresses potential future research directions

A LITERATURE REVIEW FOR EXPERIMENTAL STUDIES OF BANK RUNS / Banka Hücumlarına İlişkin Deneysel Çalışmalara Ait Bir Literatür Taraması

With the bank runs experienced in different western countries during and after the 2007-2008 global financial crisis, bank run phenomena can be seen as the awakening of a ghost in financial markets, which is a definite call for research for the fundamental factors that derive bank runs. Prior to the global financial crisis there were only two experimental researches of bank runs. Parallel with the experimental methods being popular in finance and the latest global financial crisis, the number of papers in the field has risen sharply. This paper reviews the state of art for the experimental researches of bank runs. The results of the literature review indicate that some papers are approaching to the issue in a more individual level by taking into account psychological factors, while other papers are mostly interested in macro impacts of bank runs, such as contagion effects

The effect of market power on bank risk taking in Turkey

The aim of this paper is to understand the role of market power on the loan risk and overall bank risk measures for Turkish banks during 2001-2009. Testing for this question is particularly important for the Turkish banking system, which experienced an intense regulation process after 2000 leading to a significant decrease in the number of banks and thereby possibly reducing competition. The results of the study provide some evidence regarding the competition-stability hypothesis

Before and after the Crisis: A Look at the SMEs in Emerging Economies

. The aim of this chapter is to understand effects of the recent crisis on the financial constraints that small and medium size enterprises have experienced in emerging economies. Using the firm level survey data provided by the World Bank, a descriptive analysis is conducted by calculating the average of the financial obstacles that the firms had experienced before and after the crisis, and the existence of statistical difference between the two periods is tested. The results indicate that the small and medium size enterprises suffer more from financial constraints relative to large firms. Financial constraints that the small and medium size firms had experienced are largely affected by the recent global financial crisis, relative to the large firms. However, effects of the financial constraints on real variables such as investment, innovation, and research and development expenditures cannot be examined due to data limitations. This chapter contributes to the limited literature of financial constraints experienced by the small and medium enterprises in emerging economies by taking the effect of the recent global financial crisis into account. The novelty of this chapter comes from the dataset: "The World Bank's World Business Environment Surveys," which provides a large sample of emerging countries