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How does ownership structure affect the profitability of Turkish banks? A comparative analysis of determinants

Author

Listed:
  • Ahsen Emir Bulut

    (Dokuz Eylül University, Graduate School of Social Sciences, Kuruçeşme, Izmir, Turkiye)

  • Nilgun Acar Balaylar

    (Dokuz Eylül University, Faculty of Business Administration and Economics, Department of Economics, Izmir, Turkiye)

  • Turan Karimli

    (Azerbaijan State Economic University, Narimanov, Baku, Azerbaijan; Western Caspian University, Baku, Azerbaijan)

Abstract

This study examines the determinants of profitability of deposit banks in Turkiye taking into account differences in the ownership structures of public, private domestic and foreign-owned banks. The aim of the study is to analyse whether the factors determining profitability change depending on the managerial differences that the ownership structure may entail. A seemingly unrelated regression method with monthly data from 2010 to 2022 is used for this purpose. Our findings suggest that the real effective exchange rate, inflation, and non-interest income variables have common effects on profitability regardless of bank ownership. However, the bank capital ratio, bank size, loan to deposit ratio, and economic activity affect profitability differently across bank ownership types.

Suggested Citation

  • Ahsen Emir Bulut & Nilgun Acar Balaylar & Turan Karimli, 2024. "How does ownership structure affect the profitability of Turkish banks? A comparative analysis of determinants," Public Sector Economics, Institute of Public Finance, vol. 48(3), pages 337-361.
    • Handle: RePEc:ipf:psejou:v:48:y:2024:i:3:p:337-361
    DOI: 10.3326/pse.48.3.4
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    More about this item

    Keywords

    ownership structure; Turkiye; bank profitability; seemingly unrelated regression;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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