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Financial Fragility and Basic Economic Indicators in Turkey

Author

Listed:
  • Sule Yuksel Yigiter

    (Erzincan Binali Yıldırım University FEAS Department of Business Administration, Erzincan, Turkey)

  • Salim Sercan Sari

    (Erzincan Binali Yıldırım University FEAS Department of Business Administration, Erzincan, Turkey)

Abstract

Financial fragility emerges as a concept that measures economic resilience against crises. Economies with high financial fragility suffer greater exposure to economic crises. This study was conducted to show how the US dollar exchange rate, BIST 100 Index, foreign trade volume, and credit default swap (CDS) affect financial fragility. The study takes into account the January 2013-January 2021 period by conducting analyses using monthly data. The study examines the possible effects of the dollar exchange rate, BIST 100 Index, foreign trade volume, and CDS on financial fragility using the autoregressive distributed lag (ARDL) bound test. According to the results, the study has determined the BIST 100 Index and CDS premium to have short- and long-term effects on financial fragility. In addition, foreign trade volume was observed to negatively affect financial fragility in the short and long term and the dollar exchange rate to have no long-term effect on financial fragility.

Suggested Citation

  • Sule Yuksel Yigiter & Salim Sercan Sari, 2022. "Financial Fragility and Basic Economic Indicators in Turkey," Muhasebe Enstitusu Dergisi - Journal of Accounting Institute, Istanbul University Business School, vol. 0(67), pages 1-13, July.
    • Handle: RePEc:ist:imeder:v:0:y:2022:i:67:p:1-13
    DOI: :10.26650/MED.1121035
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    References listed on IDEAS

    as
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    4. Rinaldi, Laura & Sanchis-Arellano, Alicia, 2006. "Household debt sustainability: what explains household non-performing loans? An empirical analysis," Working Paper Series 570, European Central Bank.
    5. Norman V. Loayza & Claudio Raddatz, 2007. "The Structural Determinants of External Vulnerability," The World Bank Economic Review, World Bank, vol. 21(3), pages 359-387, October.
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