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The Profit-Structure Relationship In The Turkish Banking Industry Using Direct Measures Of Efficiency

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  • Adnan Kasman

    (Vanderbilt University, Department of Economics)

Abstract

This paper addresses the relationship between profit and market concentration for the individual banking market. We employ a new model developed by Berger (1995) to test four competing hypotheses for the Turkish banking industry over the years 1988 to 1996. The data suggest that there is no positive and statistically significiant relationship between market concentration and profitability. Therefore, market concentration in the Turkish banking industry had no role in explaining profitability during the same period. However, there is some evidence supporting the relative market power and efficient structure hypotheses if we exclude direct measures of inefficiency from the regression. When we include X-inefficiency and scale inefficiency measures, which are obtained by using stochastic cost frontier model, there is support for X- efficiency version of the efficientstructure hypothesis for Turkish banks.

Suggested Citation

  • Adnan Kasman, 2001. "The Profit-Structure Relationship In The Turkish Banking Industry Using Direct Measures Of Efficiency," Ege Academic Review, Ege University Faculty of Economics and Administrative Sciences, vol. 1(1), pages 141-164.
    • Handle: RePEc:ege:journl:v:1:y:2001:i:1:p:141-164
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    Cited by:

    1. Tuncay elik & Muhittin Kaplan, 2016. "Testing the Structure-Conduct-Performance Paradigm for the Turkish Banking Sector: 2008-2013," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1625-1631.
    2. Tuncay Celik & Levent Citak, 2016. "Banking Competition, Financial Liberalization and Economic Growth: Evidence from Turkish Economy during the 1990-2014 Period," International Journal of Economics and Financial Issues, Econjournals, vol. 6(4), pages 1750-1755.

    More about this item

    JEL classification:

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

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