Examining the Time-Dependent Asymmetric Effects of Participation Banking on Industrial Production in Türkiye

Abstract

Participation banks play an essential role, especially for interest-sensitive individuals and institutions. Their fundamental mission is to collect deposits and channel the funds obtained to productive purposes. Thus, they contribute to increasing social welfare. Based on this argument, the study aims to examine the role of participation banks’ financing on industrial production in Türkiye. In this study, it is collected 223 months of secondary data, starting from January 2005 until July 2023. The relevant data is tested with Time-Varying Causality Analysis. The results of this study revealed that the effect of commercial loans provided by participation banking on industrial production is limited. Although occasional asymmetric causality exists between the variables, no time-dependent relationship was detected after 2017.

Keywords

• Participation Banking
• Time-Varying Causality Analysis
• Industrial Production Index
• Asymmetric Effects
• Sector Loans

Türkiye’de Katılım Bankacılığının Sanayi Üretimi Üzerindeki Zamana Bağlı Asimetrik Etkilerinin İncelenmesi

Abstract

Katılım bankaları özellikle faiz hassasiyeti olan bireyler ve kurumlar için önemli bir vazife görmektedir. Başta mevduat toplamak ve elde edilen fonu üretken amaçlara kanalize etmek gibi misyona sahiptir. Böylelikle toplum refahının arttırılmasına katkı sağlamaktadır. Bu savdan hareketle, çalışmanın amacı Türkiye’deki katılım bankacılığı finansmanının sanayi üretimi üzerindeki rolünü incelemektir. Bu çalışmada Ocak 2005’ten başlayarak Temmuz 2023’e kadar olan toplam 223 aylık ikincil veriler toplanmıştır. Söz konusu veriler Zamanla Değişen Nedensellik Analizi ile test edilmiştir. Bu çalışmanın sonuçları, katılım bankacılığı tarafından sağlanan ticari kredilerin sanayi üretimi üzerindeki etkisinin kısıtlı olduğunu ortaya koymuştur. Dönem dönem değişkenler arasında asimetrik nedensellik varsa da 2017 sonrasında zaman bağlı bir ilişki tespit edilememiştir.

Keywords

• Katılım Bankacılığı
• Zamanla Değişen Nedensellik Analizi
• Sanayi Üretim Endeksi
• Asimetrik Etkiler
• Sektör Kredileri

References

1. [1] S. Yüksel and İ. Canöz, “Does Islamic Banking Contribute to Economic Growth and Industrial Development in Turkey?,” IKONOMIKA, vol. 2, no. 1, pp. 93–102, May 2017.
2. [2] H. Furqani and R. Mulyany, “Islamic banking and economic growth: Empirical evidence from Malaysia,” Journal of Economic Cooperation & Development, vol. 30, no. 2, pp. 59–74, Jan. 2009.
3. [3] M. Abduh and N. T. Chowdhury, “Does Islamic banking matter for economic growth in Bangladesh,” Journal of Islamic Economics, Banking and Finance, vol. 8, no. 3, pp. 104–113, Sep. 2012.
4. [4] M. Abduh and M. Azmi Omar, “Islamic banking and economic growth: the Indonesian experience,” International Journal of Islamic and Middle Eastern Finance and Management, vol. 5, no. 1, pp. 35–47, Mar. 2012.
5. [5] I. Setiawan, “The Role of Islamic Banking in the Development of Economic Sectors in Indonesia,” International Journal of Applied Business Research, vol. 1, no. 02, pp. 88–99, Jul. 2019.
6. [6] M. S. Sarwer, M. Ramzan and W. Ahmad, “Does Islamic banking system contributes to economy development,” Global Journal of Management and Business Research, vol. 13, no. 2, pp. 60–68, 2013.
7. [7] M. I. Tabash and R. S. Dhankar, “Islamic Banking and Economic Growth: An Empirical Evidence from Qatar,” Journal of Applied Economics and Business, vol. 2, no. 1, pp. 51–67, Apr. 2014.
8. [8] M. S. Abd. Majid and S. H. Kassim, “Assessing the contribution of Islamic finance to economic growth,” Journal of Islamic Accounting and Business Research, vol. 6, no. 2, pp. 292–310, Sep. 2015.

9. [9] I. M. Lawal and U. B. Imam, “Islamic finance and economic growth: Empirical evidence from Nigeria,” Journal of Economics and Sustainable Development, vol. 7, no. 16, pp. 99–108, 2016.
10. [10] N. Hachicha and A. Ben Amar, “Does Islamic bank financing contribute to economic growth? The Malaysian case,” International Journal of Islamic and Middle Eastern Finance and Management, vol. 8, no. 3, pp. 349–368, Aug. 2015.
11. [11] M. Wahab, O. Mufti and M. S. Murad, “The study of co-integration and causal link between Islamic Bank financing and economic growth,” Abasyn University Journal of Social Sciences, vol. 9, no. 2, pp.134–146, Jan. 2016.
12. [12] K. Bougatef, M. S. Nakhli, and O. Mnari, “The nexus between Islamic banking and industrial production,” ISRA International Journal of Islamic Finance, vol. 12, no. 1, pp. 103–114, Mar. 2020.
13. [13] S. A. Solarin, S. Hammoudeh, and M. Shahbaz, “Influence of economic factors on disaggregated Islamic banking deposits: Evidence with structural breaks in Malaysia,” Journal of International Financial Markets, Institutions and Money, vol. 55, pp. 13–28, Jul. 2018.
14. [14] M. A. Shah, A. Rashid and M. Khaleequzzaman, “Capital Structure Decisions in Islamic Banking: Empirical Evidence from Pakistan,” Journal of Islamic Banking & Finance, vol. 34, no. 2, pp. 88–103, Jun. 2017.
15. [15] S. Kassim, “Islamic finance and economic growth: The Malaysian experience,” Global Finance Journal, vol. 30, pp. 66–76, May 2016.
16. [16] N. Setyowati, “Macroeconomic Determinants of Islamic Banking Products in Indonesia,” Economies, vol. 7, no. 2, p. 53, Jun. 2019.
17. [17] E. Ergeç and Ö. Selçuk, “Causality Relationship Between Banking & Industrial Production: Comparing Islamic & Conventional Banking in Turkey,” Equinox Journal of Economics Business and Political Studies, vol. 7, no. 2, pp. 64–81, Sep. 2020.
18. [18] M. Çalış and F. Kaya, “The Impacts of Participation Banks on Real Economy: A Case of Turkey,” Abant Sosyal Bilimler Dergisi, vol. 22, no. 2, pp. 765–781, Jul. 2022.
19. [19] S. Akın, S. Duramaz, and İ. E. Karaa, “Do Participation Banking Have an Alternative Role in the Monetary Transmission Mechanism? A Nonlinear Approach,” Academic Review of Humanities and Social Sciences, vol. 5, no. 2, pp. 275–297, Dec. 2022.
20. [20] H. Kazak, B. Uluyol, A. T. Akcan and M. Iyibildiren, “The impacts of conventional and Islamic banking sectors on real sector growth: Evidence from time-varying causality analysis for Turkiye,” Borsa Istanbul Review, vol. 23, pp. 15-29, Sep. 2023.
21. [21] B. Tekin, B. “Empirical Reflections of the Nexus between Dual Banking System Credits and Industry Production in Turkey: Cointegration and Causality Analysis,” Çankırı Karatekin Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, vol. 11, no. 2, pp. 595-623, Dec. 2021.
22. [22] C. W. J. Granger, “Investigating Causal Relations by Econometric Models and Cross-spectral Methods,” Econometrica, vol. 37, no. 3, p. 424, Aug. 1969.
23. [23] R. F. Engle and C. W. J. Granger, “Co-Integration and Error Correction: Representation, Estimation, and Testing,” Econometrica, vol. 55, no. 2, p. 251, Mar. 1987.
24. [24] C. W. J. Granger, “Some recent development in a concept of causality,” Journal of Econometrics, vol. 39, no. 1–2, pp. 199–211, Sep. 1988.
25. [25] H. Y. Toda and T. Yamamoto, “Statistical inference in vector autoregressions with possibly integrated processes,” Journal of Econometrics, vol. 66, no. 1–2, pp. 225–250, Mar. 1995.
26. [26] P. K. Wesseh and B. Zoumara, “Causal independence between energy consumption and economic growth in Liberia: Evidence from a non-parametric bootstrapped causality test,” Energy Policy, vol. 50, pp. 518–527, Nov. 2012.
27. [27] R. S. Hacker and A. Hatemi-J, “Tests for causality between integrated variables using asymptotic and bootstrap distributions: theory and application,” Applied Economics, vol. 38, no. 13, pp. 1489–1500, Jul. 2006.
28. [28] A. Hatemi-J, “Asymmetric causality tests with an application,” Empirical Economics, vol. 43, no. 1, pp. 447–456, May 2011.
29. [29] J. H. Stock and M. W. Watson, “Evidence on Structural Instability in Macroeconomic Time Series Relations,” Journal of Business & Economic Statistics, vol. 14, no. 1, p. 11, Jan. 1996.
30. [30] A. Barnett, H. Mumtaz, and K. Theodoridis, “Forecasting UK GDP growth and inflation under structural change. A comparison of models with time-varying parameters,” International Journal of Forecasting, vol. 30, no. 1, pp. 129–143, Jan. 2014.
31. [31] N. Groenewold and P. Fraser, “Time-varying estimates of CAPM betas,” Mathematics and Computers in Simulation, vol. 48, no. 4–6, pp. 531–539, Jun. 1999.
32. [32] R. Inglesi-Lotz, M. Balcilar, and R. Gupta, “Time-varying causality between research output and economic growth in US,” Scientometrics, vol. 100, no. 1, pp. 203–216, Feb. 2014.
33. [33] P. Perron, “The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis,” Econometrica, vol. 57, no. 6, p. 1361, Nov. 1989, doi: 10.2307/1913712.
34. [34] C. F. Tang, “The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis,” The IUP Journal of Public Finance, vol. 4, no. 4, pp. 29-38, Nov. 2008.
35. [35] V. Yılancı and Ş. Bozoklu, “Türk Sermaye Piyasasında Fiyat ve İşlem Hacmi İlişkisi: Zamanla Değişen Asimetrik Nedensellik Analizi,” Ege Akademik Bakis (Ege Academic Review), vol. 14, no. 2, pp. 211–211, Apr. 2014, doi: 10.21121/eab.2014218052.
36. [35] E. Beşoluk and A. Keskin, “Türkiye’de Doğrudan Yabancı Yatırımların Belirleyicileri: Hacker ve Hatemi-J Nedensellik Analizi,” Journal of Emerging Economies and Policy, vol. 8, no. 1, pp. 266–284, June 2023,
37. [37] C. W. J. Granger and G. Yoon, “Hidden Cointegration,” SSRN Electronic Journal, 2002, Published, doi: 10.2139/ssrn.313831.