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The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey

Year 2018, Volume: 4 Issue: 2, 57 - 72, 01.06.2018

Fatih Cemil Özbuğday Önder Özgür

Abstract

Following the two severe crises in the beginnings of 2000s, Turkey had to implement a radical set of reforms in her banking sector. This study is the first attempt to empirically investigate the spillover effects of these reforms on the real economy. Using industry-level data for the period 1998-2003, the study employs a difference-in-differences approach. The set of findings indicate that the restructuring reforms had positive spillovers for bank-dependent large firms, small firms were not able to shield themselves from the stricter measures over banks restricted bank-dependent firms to access external funds. All these findings have important implications for policymakers

Keywords

Banking Reform Industry Firm Size Firm Finance

References

  • Ashcraft, A. B. (2005), “Are banks really special? New evidence from the FDIC-induced failure of healthy banks.” The American Economic Review, Volume: 95, Issue: 5, p. 1712-1730.
  • Berger, A. N., & Udell, G. F. (1995), “Relationship lending and lines of credit in small firm finance.” Journal of Business, Volume: 68, Issue: 3, p. 351-381.
  • Berger, A. N., & Udell, G. F. (1998), “The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle.” Journal of banking& Finance, Volume: 22, Issue: 6, p. 613-673.
  • Berger, A. N., & Udell, G. F. (2002), “Small business credit availability and relationship lending: The importance of bank organisational structure.” The Economic Journal, Volume: 112, Issue: 477, p.32-53.
  • Bernal-Verdugo, L. E., Furceri, D., & Guillaume, D. (2013), “Banking crises, labor reforms, and unemployment.” Journal of Comparative Economics,Volume: 41, Issue:4, p. 1202-1219.
  • Bernanke, B. S., & Blinder, A. S. (1988), “Credit, money, and aggregate demand.”American Economic Review, Volume:78, Issue:2, p. 435-439
  • Bernanke, B. S., Lown, C. S., & Friedman, B. M. (1991), “The credit crunch.” Brookings Papers on Economic Activity, Volume:2, p.205-247.
  • Bonaccorsi di Patti, Emilia, & Giovanni Dell'Ariccia. (2004): “Bank competition and firm Creation.” Journal of Money, Credit, And Banking, Volume: 36, Issue:2, p. 225-251.
  • Boyd, J. H., & Prescott, E. C. (1986), “Financial intermediary-coalitions.” Journal of Economic Theory, Volume:38, Issue:2, p. 211-232.
  • Braun, M., & Larrain, B. (2005), “Finance and the business cycle: International, inter- industry evidence.” The Journal of Finance, Volume:60, Issue:3, p. 1097-1128.
  • Brinkmann, E. J., & Horvitz, P. M. (1995), “Risk-based capital standards and the credit crunch.” Journal of Money, Credit and Banking, Volume: 27, Issue: 3, p.848-863.
  • Campello, M., Graham, J. R., & Harvey, C. R. (2010). “The real effects of financial constraints: Economics, Volume: 97, Issue:3, p.470-487. from a financial crisis.” Journal of Financial
  • Chava, S., & Purnanandam, A. (2011), “The effect of banking crisis on bank-dependent borrowers.” Journal of Financial Economics, Volume:99, Issue:1, p.116-135.
  • Chor, D., & Manova, K. (2012). “Off the cliff and back? Credit conditions and international trade during the global financial crisis.” Journal of international economics, Volume:87, Issue: 1, p.117-133.
  • Cetorelli, N., & Gambera, M. (2001), “Banking market structure, financial dependence and growth: Finance, Volume:56, Issue:2, p. 617-648. evidence from industry data.” The Journal of
  • Damar, H. E. (2007), “Does post-crisis restructuring decrease the availability of banking services? The case of Turkey.” Journal of Banking & Finance, Volume:31, Issue:9, p. 2886-2905.
  • Damar, H. E. (2009). “A lesson learned? Pre and post-crisis entry decisions in Turkish banking.” Contemporary Economic Policy, Volume:27, Issue:11, p. 97-108.
  • Dell'Ariccia, Giovanni, Enrica Detragiache, & Raghuram Rajan. (2008), “The real effect of banking crises.” Journal of Financial Intermediation, Volume: 17, Issue:1, p. 89-112.
  • Detragiache, Ms Enrica, & Giang Ho. (2010), “Responding to banking crises: Lessons from cross-country evidence.” International Monetary Fund, Issue: 10-18, p. 1-33.
  • Diamond, D. W. (1984), “Financial intermediation and delegated monitoring.” The Review of Economic Studies, Volume:51, Issue:3, p.393-414.
  • Duchin, R., Ozbas, O., & Sensoy, B. A. (2010), “Costly external finance, corporate investment, and Economics, Volume:97, Issue:3, p. 418-435. mortgage credit crisis.” Journal of Financial
  • Ekinci, N. K. (2002),“Anatomy of the recent crisis in Turkey.” Journal of Economic Cooperation, Volume:23, Issue:1, p. 89-108.
  • Furlong, F. T. (1992), “Capital regulation and bank lending.” Economic Review-Federal Reserve Bank Of San Francisco, Volume:3, p. 23-33
  • Gambacorta, L., & Mistrulli, P. E. (2004), “Does bank capital affect lending behavior?.” Journal of Financial Intermediation, Volume:13, Issue:4, p. 436-457.
  • Giannetti, M., & Simonov, A. (2013),1On the real effects of bank bailouts: Micro evidence from Japan.” American Economic Journal: Macroeconomics, Volume:5, Issue:1, p. 135-167.
  • Hancock, D., & Wilcox, J. A. (1998), “The “credit crunch” and the availability of credit to small business.” Journal of Banking & Finance, Volume:22, Issue:6, p.983-1014.
  • Hubbard, R. G. (1994), “Is there a credit channel for monetary policy?.”National Bureau of Economic Research., Issue: 4947, p. 1-47.
  • Iacovone, L., & Zavacka, V. (2009), “Banking crises and exports: Lessons from the past.” World Bank Policy Research Working Paper Series, Issue:5016, p. 1-45.
  • Klein, M. W., Peek, J., & Rosengren, E. S. (2002), “Troubled banks, impaired foreign direct investment: The role of relative access to credit.” The American Economic Review, Volume:92, Issue:3, p. 664-682.
  • Klingebiel, D. (2001), “Stock market responses to bank restructuring policies during the East Asian crisis.”World Bank Publications., Issue:2571, p. 1-45.
  • Kroszner, R. S., Laeven, L., & Klingebiel, D. (2007),“Banking crises, financial dependence, and growth.” Journal of Financial Economics, Volume:84, Issue:1, p. 187-228.
  • Küçükbıçakçı, Ramazan. (2004), “Banking restructuring programs and their economic outcomes.” Central Bank of Turkey Specialty Thesis.
  • Laeven, L., & Valencia, F. (2013), “The real effects of financial sector interventions during crises.” Journal of Money, Credit and Banking, Volume:45, Issue:1, p. 147-177.
  • Levine, R. (2005), “Finance and growth: Theory and evidence.” Handbook of Economic Growth, 1, p.865-934.
  • Levintal, O. (2013), “The real effects of banking shocks: Evidence from OECD countries.” Journal of International Money and Finance, Volume:32, p.556-578.
  • Myers, S. C., & Majluf, N. S. (1984), “Corporate financing and investment decisions. When firms have information that investors do not have.” Journal of Financial Economics, Volume:13, Issue:2, p. 187-221.
  • Onis, Z. (2009). “Beyond the 2001 financial crisis: The political economy of the new phase of neo-liberal Economy, 16(3), p.409-432. in Turkey.” Review of International Political
  • Oncu, S., &Aktas, R. (2007), “Productivity changes in Turkish banking sector during the restructuring period.” Journal of Management and Economics, Volume: 14, Issue: 1, p.247-266.
  • Özkan-Günay, E. N., Günay, Z. N., & Günay, G. (2013), “The impact of regulatory policies on risk taking and scale efficiency of commercial banks in an emerging banking sector.” Emerging Markets Finance and Trade, Volume:49, Issue:5, p.80-98.
  • Peek, J., & Rosengren, E. (1995a), “The capital crunch: Neither a borrower nor a lender be.” Journal of Money, Credit and Banking, Volume:27, Issue:3, p.625-638.
  • Peek, J., & Rosengren, E. (1995b), “Bank regulation and the credit crunch.” Journal of Banking & Finance, Volume:19, Issue:3, p.679-692.
  • Peek, J., & Rosengren, E. S. (1995c), “Banks and the availability of small business loans.” FED Working Paper Series, Issue: 95-1, p. 47-79.
  • Peek, Joe, & Eric S. Rosengren. (1997) “The international transmission of financial Shocks: The case of Japan.” American Economic Review Volume:87, Issue:4, p. 495-505
  • Peek, J., & Rosengren, E. S. (2000), “Collateral damage: Effects of the Japanese bank crisis on real activity in the United States.” American Economic Review, Volume:90, Issue:1, p. 30-45.
  • Petersen, M. A., & Rajan, R. G. (1994), “The benefits of lending relationships: evidence from small business data.” The Journal of Finance, Volume:49, Issue:1, p.3-37.
  • Rajan, Raghuram G., & Luigi Zingales. (1998), “Financial dependence and growth.” The American Economic Review, Volume:88, Issue: 3, p.559-586.
  • Romer, Christina D., David H. Romer, Stephen M. Goldfeld, & Benjamin M. Friedman. (1990), “New evidence on the monetary transmission mechanism.” Brookings Papers on Economic Activity, Volume:1990(1), p.149-213.
  • Steinherr, A., Tukel, A., & Ucer, M. (2004), “The Turkish banking sector, challenges and outlook in transition to EU membership.” European Economic Studies Department, College of Europe, Issue: 9, p. 1-38
  • Thakor, A. V. (1996), “Capital requirements, monetary policy, and aggregate bank lending: Theory and empirical evidence.” The Journal of Finance, Volume:51, Issue: 1, p. 279- 324.
  • Tuysuz, S. (2012), “How have the Turkish post-2001 stabilization reforms impacted on the conditional correlation between the Turkish and the main foreign stock markets?.” Applied Financial Economics, Volume:22, Issue:22, p. 1881-1898.
  • Van den Heuvel, S. J. (2002), “Does bank capital matter for monetary ttransmission?.” Economic Policy Review, Volume:8, Issue: 1, p. 259-265.
  • Yayla, M., Hekimoglu, A., & Kutlukaya, M. (2008), “Financial stability of the Turkish banking sector.” Journal of BRSA Banking and Financial Markets, Volume:2, Issue: 1, p.9-26.

Kriz Sonrası Bankacılık Sektörünün Yeniden Yapılandırılmasının Reel Etkileri: Türkiye Örneği

Year 2018, Volume: 4 Issue: 2, 57 - 72, 01.06.2018

Fatih Cemil Özbuğday Önder Özgür

Abstract

2000’li yılların başında yaşadığı iki ciddi kriz sonrasında Türkiye bankacılık sektörü adına bir dizi radikal reform tesis etmiştir. Bu çalışma, tespit edebildiğimiz kadarıyla söz konusu bankacılık reformlarının reel ekonomi üzerindeki taşma etkilerini ampirik olarak araştırmayı deneyen ilk çalışmadır. Endüstri düzeyinde veriler vasıtasıyla 1998-2003 periyodunun incelendiği çalışmada farkların farkı kullanılmıştır. Çalışmanın sonuçları, yeniden yapılandırma reformlarının bankalara bağımlı büyük firmalar üzerinde olumlu taşma etkileri olduğunu, küçük firmaların kendilerini bankacılık sisteminde hayata geçirilen katı önlemlerin sebep olduğu sonuçlardan korumakta yetersiz olduklarını ve bankalar üzerindeki bu sıkı denetimin, bankalara bağımlı firmaların dış finansmana erişimini kısıtladığını ortaya koymaktadır. Söz konusu tüm bulgular politika yapıcılar açısından önemli sonuçlar barındırmaktadır.

Keywords

Bankacılık Reformu Endüstri Firma Büyüklüğü Firma Finansmanı

References

  • Ashcraft, A. B. (2005), “Are banks really special? New evidence from the FDIC-induced failure of healthy banks.” The American Economic Review, Volume: 95, Issue: 5, p. 1712-1730.
  • Berger, A. N., & Udell, G. F. (1995), “Relationship lending and lines of credit in small firm finance.” Journal of Business, Volume: 68, Issue: 3, p. 351-381.
  • Berger, A. N., & Udell, G. F. (1998), “The economics of small business finance: The roles of private equity and debt markets in the financial growth cycle.” Journal of banking& Finance, Volume: 22, Issue: 6, p. 613-673.
  • Berger, A. N., & Udell, G. F. (2002), “Small business credit availability and relationship lending: The importance of bank organisational structure.” The Economic Journal, Volume: 112, Issue: 477, p.32-53.
  • Bernal-Verdugo, L. E., Furceri, D., & Guillaume, D. (2013), “Banking crises, labor reforms, and unemployment.” Journal of Comparative Economics,Volume: 41, Issue:4, p. 1202-1219.
  • Bernanke, B. S., & Blinder, A. S. (1988), “Credit, money, and aggregate demand.”American Economic Review, Volume:78, Issue:2, p. 435-439
  • Bernanke, B. S., Lown, C. S., & Friedman, B. M. (1991), “The credit crunch.” Brookings Papers on Economic Activity, Volume:2, p.205-247.
  • Bonaccorsi di Patti, Emilia, & Giovanni Dell'Ariccia. (2004): “Bank competition and firm Creation.” Journal of Money, Credit, And Banking, Volume: 36, Issue:2, p. 225-251.
  • Boyd, J. H., & Prescott, E. C. (1986), “Financial intermediary-coalitions.” Journal of Economic Theory, Volume:38, Issue:2, p. 211-232.
  • Braun, M., & Larrain, B. (2005), “Finance and the business cycle: International, inter- industry evidence.” The Journal of Finance, Volume:60, Issue:3, p. 1097-1128.
  • Brinkmann, E. J., & Horvitz, P. M. (1995), “Risk-based capital standards and the credit crunch.” Journal of Money, Credit and Banking, Volume: 27, Issue: 3, p.848-863.
  • Campello, M., Graham, J. R., & Harvey, C. R. (2010). “The real effects of financial constraints: Economics, Volume: 97, Issue:3, p.470-487. from a financial crisis.” Journal of Financial
  • Chava, S., & Purnanandam, A. (2011), “The effect of banking crisis on bank-dependent borrowers.” Journal of Financial Economics, Volume:99, Issue:1, p.116-135.
  • Chor, D., & Manova, K. (2012). “Off the cliff and back? Credit conditions and international trade during the global financial crisis.” Journal of international economics, Volume:87, Issue: 1, p.117-133.
  • Cetorelli, N., & Gambera, M. (2001), “Banking market structure, financial dependence and growth: Finance, Volume:56, Issue:2, p. 617-648. evidence from industry data.” The Journal of
  • Damar, H. E. (2007), “Does post-crisis restructuring decrease the availability of banking services? The case of Turkey.” Journal of Banking & Finance, Volume:31, Issue:9, p. 2886-2905.
  • Damar, H. E. (2009). “A lesson learned? Pre and post-crisis entry decisions in Turkish banking.” Contemporary Economic Policy, Volume:27, Issue:11, p. 97-108.
  • Dell'Ariccia, Giovanni, Enrica Detragiache, & Raghuram Rajan. (2008), “The real effect of banking crises.” Journal of Financial Intermediation, Volume: 17, Issue:1, p. 89-112.
  • Detragiache, Ms Enrica, & Giang Ho. (2010), “Responding to banking crises: Lessons from cross-country evidence.” International Monetary Fund, Issue: 10-18, p. 1-33.
  • Diamond, D. W. (1984), “Financial intermediation and delegated monitoring.” The Review of Economic Studies, Volume:51, Issue:3, p.393-414.
  • Duchin, R., Ozbas, O., & Sensoy, B. A. (2010), “Costly external finance, corporate investment, and Economics, Volume:97, Issue:3, p. 418-435. mortgage credit crisis.” Journal of Financial
  • Ekinci, N. K. (2002),“Anatomy of the recent crisis in Turkey.” Journal of Economic Cooperation, Volume:23, Issue:1, p. 89-108.
  • Furlong, F. T. (1992), “Capital regulation and bank lending.” Economic Review-Federal Reserve Bank Of San Francisco, Volume:3, p. 23-33
  • Gambacorta, L., & Mistrulli, P. E. (2004), “Does bank capital affect lending behavior?.” Journal of Financial Intermediation, Volume:13, Issue:4, p. 436-457.
  • Giannetti, M., & Simonov, A. (2013),1On the real effects of bank bailouts: Micro evidence from Japan.” American Economic Journal: Macroeconomics, Volume:5, Issue:1, p. 135-167.
  • Hancock, D., & Wilcox, J. A. (1998), “The “credit crunch” and the availability of credit to small business.” Journal of Banking & Finance, Volume:22, Issue:6, p.983-1014.
  • Hubbard, R. G. (1994), “Is there a credit channel for monetary policy?.”National Bureau of Economic Research., Issue: 4947, p. 1-47.
  • Iacovone, L., & Zavacka, V. (2009), “Banking crises and exports: Lessons from the past.” World Bank Policy Research Working Paper Series, Issue:5016, p. 1-45.
  • Klein, M. W., Peek, J., & Rosengren, E. S. (2002), “Troubled banks, impaired foreign direct investment: The role of relative access to credit.” The American Economic Review, Volume:92, Issue:3, p. 664-682.
  • Klingebiel, D. (2001), “Stock market responses to bank restructuring policies during the East Asian crisis.”World Bank Publications., Issue:2571, p. 1-45.
  • Kroszner, R. S., Laeven, L., & Klingebiel, D. (2007),“Banking crises, financial dependence, and growth.” Journal of Financial Economics, Volume:84, Issue:1, p. 187-228.
  • Küçükbıçakçı, Ramazan. (2004), “Banking restructuring programs and their economic outcomes.” Central Bank of Turkey Specialty Thesis.
  • Laeven, L., & Valencia, F. (2013), “The real effects of financial sector interventions during crises.” Journal of Money, Credit and Banking, Volume:45, Issue:1, p. 147-177.
  • Levine, R. (2005), “Finance and growth: Theory and evidence.” Handbook of Economic Growth, 1, p.865-934.
  • Levintal, O. (2013), “The real effects of banking shocks: Evidence from OECD countries.” Journal of International Money and Finance, Volume:32, p.556-578.
  • Myers, S. C., & Majluf, N. S. (1984), “Corporate financing and investment decisions. When firms have information that investors do not have.” Journal of Financial Economics, Volume:13, Issue:2, p. 187-221.
  • Onis, Z. (2009). “Beyond the 2001 financial crisis: The political economy of the new phase of neo-liberal Economy, 16(3), p.409-432. in Turkey.” Review of International Political
  • Oncu, S., &Aktas, R. (2007), “Productivity changes in Turkish banking sector during the restructuring period.” Journal of Management and Economics, Volume: 14, Issue: 1, p.247-266.
  • Özkan-Günay, E. N., Günay, Z. N., & Günay, G. (2013), “The impact of regulatory policies on risk taking and scale efficiency of commercial banks in an emerging banking sector.” Emerging Markets Finance and Trade, Volume:49, Issue:5, p.80-98.
  • Peek, J., & Rosengren, E. (1995a), “The capital crunch: Neither a borrower nor a lender be.” Journal of Money, Credit and Banking, Volume:27, Issue:3, p.625-638.
  • Peek, J., & Rosengren, E. (1995b), “Bank regulation and the credit crunch.” Journal of Banking & Finance, Volume:19, Issue:3, p.679-692.
  • Peek, J., & Rosengren, E. S. (1995c), “Banks and the availability of small business loans.” FED Working Paper Series, Issue: 95-1, p. 47-79.
  • Peek, Joe, & Eric S. Rosengren. (1997) “The international transmission of financial Shocks: The case of Japan.” American Economic Review Volume:87, Issue:4, p. 495-505
  • Peek, J., & Rosengren, E. S. (2000), “Collateral damage: Effects of the Japanese bank crisis on real activity in the United States.” American Economic Review, Volume:90, Issue:1, p. 30-45.
  • Petersen, M. A., & Rajan, R. G. (1994), “The benefits of lending relationships: evidence from small business data.” The Journal of Finance, Volume:49, Issue:1, p.3-37.
  • Rajan, Raghuram G., & Luigi Zingales. (1998), “Financial dependence and growth.” The American Economic Review, Volume:88, Issue: 3, p.559-586.
  • Romer, Christina D., David H. Romer, Stephen M. Goldfeld, & Benjamin M. Friedman. (1990), “New evidence on the monetary transmission mechanism.” Brookings Papers on Economic Activity, Volume:1990(1), p.149-213.
  • Steinherr, A., Tukel, A., & Ucer, M. (2004), “The Turkish banking sector, challenges and outlook in transition to EU membership.” European Economic Studies Department, College of Europe, Issue: 9, p. 1-38
  • Thakor, A. V. (1996), “Capital requirements, monetary policy, and aggregate bank lending: Theory and empirical evidence.” The Journal of Finance, Volume:51, Issue: 1, p. 279- 324.
  • Tuysuz, S. (2012), “How have the Turkish post-2001 stabilization reforms impacted on the conditional correlation between the Turkish and the main foreign stock markets?.” Applied Financial Economics, Volume:22, Issue:22, p. 1881-1898.
  • Van den Heuvel, S. J. (2002), “Does bank capital matter for monetary ttransmission?.” Economic Policy Review, Volume:8, Issue: 1, p. 259-265.
  • Yayla, M., Hekimoglu, A., & Kutlukaya, M. (2008), “Financial stability of the Turkish banking sector.” Journal of BRSA Banking and Financial Markets, Volume:2, Issue: 1, p.9-26.
There are 52 citations in total.

Details

Primary Language English
Journal Section Research Article
Authors

Fatih Cemil Özbuğday

Önder Özgür

Publication Date June 1, 2018
Published in Issue Year 2018 Volume: 4 Issue: 2

Cite

APA Özbuğday, F. C., & Özgür, Ö. (2018). The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey. Uluslararası Ekonomik Araştırmalar Dergisi, 4(2), 57-72.
AMA Özbuğday FC, Özgür Ö. The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey. UEAD. June 2018;4(2):57-72.
Chicago Özbuğday, Fatih Cemil, and Önder Özgür. “The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey”. Uluslararası Ekonomik Araştırmalar Dergisi 4, no. 2 (June 2018): 57-72.
EndNote Özbuğday FC, Özgür Ö (June 1, 2018) The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey. Uluslararası Ekonomik Araştırmalar Dergisi 4 2 57–72.
IEEE F. C. Özbuğday and Ö. Özgür, “The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey”, UEAD, vol. 4, no. 2, pp. 57–72, 2018.
ISNAD Özbuğday, Fatih Cemil - Özgür, Önder. “The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey”. Uluslararası Ekonomik Araştırmalar Dergisi 4/2 (June 2018), 57-72.
JAMA Özbuğday FC, Özgür Ö. The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey. UEAD. 2018;4:57–72.
MLA Özbuğday, Fatih Cemil and Önder Özgür. “The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey”. Uluslararası Ekonomik Araştırmalar Dergisi, vol. 4, no. 2, 2018, pp. 57-72.
Vancouver Özbuğday FC, Özgür Ö. The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey. UEAD. 2018;4(2):57-72.