• ISSN: 2148-2225 (online)

Ulaştırma ve Lojistik Kongreleri

alphanumeric journal

The Journal of Operations Research, Statistics, Econometrics and Management Information Systems

Banking Sector Instability and Economic Growth: Evidence from Turkey

bib

Yılmaz Bayar, Ph.D.

Murat Gündüz, Ph.D.

Funda H. Sezgin, Ph.D.


Abstract

The banking sector, an important component of the financial system, can affect the economic growth through raising and mobilizing the savings, channeling the funds to the productive uses and enhancing the efficiency. However, the deteriorations in the banking sector stability may negatively affect the economic growth through preventing the efficiently functioning of the aforementioned interaction channels. This study investigates the effect off banking sector instability and banking sector development on the economic growth in Turkey during August 2006-December 2018 through time series analysis. We revealed that the banking sector instability negatively affects the economic growth, but banking sector development positively affects the economic growth.

Keywords: Banking Sector Development, Banking Sector Instability, Economic Growth, Financial Development, Time Series Analysis

Jel Classification: F43, G24

Suggested citation

Bayar, Y., Gündüz, M. & Sezgin, F. H. (). Banking Sector Instability and Economic Growth: Evidence from Turkey. Alphanumeric Journal, 7(2), 263-274. http://dx.doi.org/10.17093/alphanumeric.641629

References

  • Aslan, Ö., Küçükaksoy, İ. (2006). Finansal gelişme ve ekonomik büyüme ilişkisi: Türkiye ekonomisi üzerine ekonometrik bir uygulama. Ekonometri ve İstatistik e-Dergisi, (4), 25-38.
  • Bagehot, W. (1873). Lombart street: a description of the money market. New York:Wiley & Sons.
  • Batuo, E., Mlambo, K., Asongu, S.A. (2017). Linkages between financial development, financial instability, financial liberalisation and economic growth in Africa. MPRA Paper No. 82641, Erişim Tarihi: 04.01.2019, https://mpra.ub.uni-muenchen.de/82641/1/MPRA_paper_82641.pdf
  • Bayar, Y., Kaya, A., Yıldırım, M. (2014). Effects of stock market development on economic growth: evidence from Turkey. International Journal of Financial Research, 5(1), 93-100.
  • Bayar, Y., , Öztürk, Ö.F. (2016). Financial development and shadow economy in European Union transition economies. Managing Global Transitions, 14 (2), 157–173.
  • Bayar, Y., Şaşmaz, M.Ü., Öztürk, Ö.F. (2017). Finansal gelişme ve vergi gelirleri: OECD ülkeleri örneği. Avrasya İşletme ve İktisat Dergisi,12, 51-63.
  • Bist, J.P. (2018). Financial development and economic growth: evidence from a panel of 16 African and Non-African low-income countries. Cogent Economics & Finance, 6, 1-17. DOI: 10.1080/23322039.2018.1449780.
  • Bozoklu, Ş., Yılancı, V. (2013). Finansal gelişme ve iktisadi büyüme arasındaki nedensellik ilişkisi: gelişmekte olan ekonomiler için analiz. Dokuz Eylül Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 28(2), 161-187.
  • CBRT (2019). Elektronik Veri Dağıtım Sistemi-Para ve Banka İstatistikleri, Erişim Tarihi: 10.01.2019, https://evds2.tcmb.gov.tr/index.php?/evds/serieMarket/#collapse_4
  • Cihák, M., Demirgüç-Kunt, A., Feyen, E., Levine, R. (2012). Benchmarking financial systems around the world. Policy Research Working Paper 6175.Washington: World Bank.
  • Creel, J., Hubert, P., Labondance, F. (2015). Financial stability and economic performance. Economic Modelling, 48, 25–40. DOI: 10.1016/j.econmod.2014.10.025
  • Demirgüç-Kunt, A., Levine, R. (2008). Finance, financial sector policies, and long-run growth. Policy Research Working Paper WPS4469, Washington:World Bank.
  • Duprey, T., Klaus, B., Peltonen, T. (2017). Dating systemic financial stress episodes in the EU countries. Journal of Financial Stability, 32, 30–56. DOI: 10.1016/j.jfs.2017.07.004
  • Durusu-Ciftci, D., Ispir, M.S., Yetkiner, H. (2017). Financial development and economic growth: some theory and more evidence. Journal of Policy Modeling, 39, 290–306. DOI: 10.1016/j.jpolmod.2016.08.001
  • Epstein, B., Shapiro, A.F. (2019). Financial development, unemployment volatility, and sectoral dynamics. Journal of Economic Dynamics and Control, 99, 82-102. DOI: 10.1016/j.jedc.2018.11.004
  • Felek, Ş., Yayla, N., Çağlar, A. (2018). Türkiye’de AB doğrudan yatırımları, finansal gelişme ve ekonomik büyüme ilişkisine ARDL yaklaşımı. Uluslararası İktisadi ve İdari İncelemeler Dergisi, 20, 63-82.
  • Goldsmith, R.W. (1969). Financial structure and development, New Haven: Yale University Press.
  • Güneş, S. (2012). Finansal gelişmişlik ve büyüme arasındaki nedensellik testi: Türkiye örneği. Doğuş Üniversitesi Dergisi, 14(1), 73-85.
  • Greenwood, J., Jovanovic, B. (1990). Financial development, growth, and the distribution of income. Journal of Political Economy, 98(5), 1076-l108.
  • Gregory, A. W., Hansen, B. E. (1996). Residual-based tests for cointegration in models with regime shifts. Journal of Econometrics, 70(1), 99-126. DOI: 10.1016/0304-4076(69)41685-7
  • IMF (2019). Financial development ındex database, Erişim Tarihi: 06.01.2019, http://data.imf.org/?sk=F8032E80-B36C-43B1-AC26-493C5B1CD33B
  • Jayakumar, M., Pradhan, R.P., Dash, S., Maradana, R.P., Gaurav, K. (2018). Banking competition, banking stability, and economic growth: are feedback effects at work? Journal of Economics and Business, 96, 15-41. DOI: 10.1016/j.jeconbus.2017.12.004
  • Kar, M.,Pentecost, E. (2000). The direction of causality between financial development and economic growth in Turkey: further evidence. Economic Research Paper, Department of Economics, Loughborough University, No. 00/27. Loughborough.
  • Katircioğlu, S., Katircioğlu, S., Altinay, M. (2018). Interactions between tourism and financial sector development: evidence from Turkey. Service Industries Journal, 38(9-10), 519-542. DOI: 10.1080/02642069.2017.1406479
  • King, R. G., Levine, R. (1993). Finance and growth: Schumpeter might be right. Quarterly Journal of Economics, 108(3), 717-737.
  • Levine, R. (1997). Financial development and economic growth: views and agenda. Journal of Economic Literature, 35(2), 688-726.
  • Loayza, N. V., Ranciere, R. (2006). Financial development, financial fragility, and growth. Journal of Money, Credit and Banking, 38(4), 1051–1076.
  • Magkonis, G., Tsopanakis, A. (2014). Exploring the effects of financial and fiscal vulnerabilities on G7 economies: evidence from SVAR analysis. Journal of International Financial Markets, Institutions and Money, 32, 343–367. DOI: 10.1016/j.intfin.2014.06.010
  • Manu, L.P., Adjasi, C.K.D., Abor, J., Harvey, S.K. (2011). Financial stability and economic growth: a cross-country study. International Journal of Financial Services Management, 5(2), 121–138. DOI: 10.1504/IJFSM.2011.041920
  • Mishkin, F. S. (1992). Anatomy of a financial crisis. Journal of Evolutionary Economics, 2(2), 115–130.
  • Monnin, P., Jokipii, T. (2010). The impact of banking sector stability on the real economy. Swiss National Bank Working Papers, 2010-5, Erişim Tarihi: 28.12.2018, https://www.snb.ch/n/mmr/reference/working_paper_2010_05/source/working_paper_2010_05.en.pdf
  • Narayan, P. K., Popp, S. (2010). A new unit root test with two structural breaks in level and slope at unknown time. Journal of Applied Statistics, 37(9), 1425–1438. DOI: 10.1080/02664760903039883
  • Nasreen, S., Anwar, S. (2017). How financial stability affects economic development in south asia: a panel data analysis. European Online Journal of Natural and Social Sciences, 7(1), 54-66.
  • Ngare, E., Morekwa Nyamongo, E., Misatib, N. (2014). Stock market development and economic growth in Africa. Journal of Economics and Business, 74, 24-39. DOI: 10.1016/j.jeconbus.2014.03.002
  • Ozcan, B., Ari, A. (2011). Finansal gelişme ve ekonomik büyüme arasındaki iliskinin ampirik bir analizi: Türkiye örneği. Business and Economics Research Journal, 2(1), 121-142.
  • Pan, L., Mishra, V. (2018). Stock market development and economic growth: empirical evidence from China. Economic Modelling, 68, 661-673. DOI: 10.1016/j.econmod.2017.07.005
  • Pata, U.K., Ağca, A. (2018). Finansal gelişme ve ekonomik büyüme arasındaki eşbütünleşme ve nedensellik ilişkisi: Türkiye örneği. Osmaniye Korkut Ata Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 2(2), 115-128.
  • Petkovski, M., Kjosevski, J. (2014). Does banking sector development promote economic growth? an empirical analysis for selected countries in central and south eastern europe. Economic Research-Ekonomska Istraživanja, 27(1), 55-66. DOI: 10.1080/1331677X.2014.947107
  • Phillips, P.C.B., Hansen, B.E. (1990). Statistical inference in instrumental variable regression with I(1) processes. Review of Economic Studies. 57, 99-125. DOI: 10.2307/2297545
  • Reinhart, C.M., Rogoff, K.S. (2009). This time is different: eight centuries of financial folly. New Jersey: Princeton University Press.
  • Schumpeter, J. (1912). The theory of economic development. Cambridge: Harvard University Press.
  • Shahbaz, M., Shahbaz, S.J.H., Ahmad, N., Alam, S. (2016). Financial development and environmental quality: the way forward. Energy Policy, 98, 353-364. DOI: 10.1016/j.enpol.2016.09.002
  • Topcu, M., Çoban, S. (2017). Financial development and firm growth in Turkish manufacturing ındustry: evidence from heterogeneous panel based non-causality test. Economic Research-Ekonomska Istraživanja, 30(1), 1758-1769, DOI:10.1080/1331677X.2017.1383179
  • TSI (2019). Sanayi- Sanayi Üretim Endeksi (Genel) (2015=100), Erişim Tarihi: 10.01.2019, http://tuik.gov.tr/UstMenu.do?metod=temelist
  • Von Furstenberg, G.M., Fratianni, M. (1996). Indicators of financial development. North American Journal of Economics & Finance, 7(1), 19-29.
  • World Bank (2019a). Global financial development report 2017 / 2018: bankers without borders. Erişim Tarihi: 05.01.2019, https://www.worldbank.org/en/publication/gfdr/data/global-financial-development-database
  • World Bank (2019b). Domestic credit to private sector (% of GDP), Erişim Tarihi: 10.01.2019, https://data.worldbank.org/indicator/fs.ast.prvt.gd.zs

Volume 7, Issue 2, 2019

2019.07.02.ECON.05

alphanumeric journal

Volume 7, Issue 2, 2019

Pages 263-274

Received: Sept. 4, 2019

Accepted: Dec. 30, 2019

Published: Dec. 31, 2019

Full Text [501.8 KB]

2019 Bayar, Y., Gündüz, M., Sezgin, FH.

This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence, which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.

Creative Commons Attribution licence

scan QR code to access this article from your mobile device

Contact Us

Faculty of Transportation and Logistics, Istanbul University
Beyazit Campus 34452 Fatih/Istanbul/TURKEY

Bahadır Fatih Yıldırım, Ph.D.
editor@alphanumericjournal.com
+ 90 (212) 440 00 00 - 13219

alphanumeric journal

alphanumeric journal has been publishing as "International Peer-Reviewed Journal" every six months since 2013. alphanumeric serves as a vehicle for researchers and practitioners in the field of quantitative methods, and is enabling a process of sharing in all fields related to the operations research, statistics, econometrics and management informations systems in order to enhance the quality on a globe scale.