THE ROLE OF BANKING SYSTEM IN PROVINCIAL ECONOMIC DEVELOPMENT: A STUDY OF TURKIYE, FROM THE 70S TO THE 2000S

Year 2024, Volume: 46 Issue: 1, 233 - 247, 27.06.2024

Şefika Betül Esen

https://doi.org/10.14780/muiibd.1427473

Abstract

This research examines the relationship between banking activities and provincial economic development. In particular, the study offers insight on the nature of the regional economic development discrepancies in Turkiye. The study finds that, despite the trend towards decentralisation that takes place in regional economic policies, the banking system adopts centralisation policies. Using dynamic generalised method of moment (GMM) estimates, we evaluated a unique data set including 39 years of provincial demographic, socioeconomic, and financial factors in Turkey. The study demonstrates that the banking intermediation is detrimental to provincial development. The Turkish banking system’s hierarchical structure prevents financial intermediaries from fulfilling their role in fostering development. Consolidation and concentration strategies must be reassessed, since they tend to favour centralisation, which has been shown to be inefficient for regional convergence. The results also suggest that branch managers should be granted greater decision-making authority to make better use of locally produced information when approving or rejecting projects, which would eventually lead to a reduction in provincial disparities.

Keywords

soft & hard information, Financial intermediation, branch banking, provincial economic growth, dynamic GMM

Bankacılık Sisteminin İl Bazında İktisadi Kalkınmadaki Rolü: 70'lerden 2000'lere Türkiye örneği.

Abstract

Bu araştırma, bankacılık faaliyetleri ile illerin ekonomik kalkınması arasındaki ilişkiyi incelemektedir. Çalışma özellikle Türkiye'deki bölgesel ekonomik kalkınma farklılıklarının doğasına ışık tutmaktadır. Araştırma, bölgesel ekonomi politikalarında gerçekleşen adem-i merkeziyetçi eğilime rağmen, bankacılık sisteminin merkezileşme politikalarını benimsediğini belirlemiştir. Çalışmada "Dynamic Generalised Method of Moments (DGMM)" tahminleri kullanarak Türkiye'deki 39 yıllık demografik, sosyoekonomik ve finansal faktörleri içeren benzersiz bir veri setini değerlendirilmiştir. Çalışma, bankacılık aracılığının il kalkınması için negatif etkisi olduğunu göstermektedir. Türk bankacılık sisteminin hiyerarşik yapısı, finansal aracıların gelişmeyi teşvik etme rolünü yerine getirmesini engellediği ortaya konmuştur. Bankaların birleşme ve konsantrasyon stratejileri tekrar değerlendirilmelidir, çünkü bunların genellikle bölgesel yakınsama için etkisiz olduğu gösterilmiştir. Sonuçlar ayrıca şube müdürlerine, projeleri onaylama veya reddetme konusunda daha fazla karar alma yetkisi verilmesi gerektiğini, bunun da nihayetinde iller arasındaki farklılıklarının azaltılmasına yol açacağı ön görülmüştür.

Keywords

Finansal aracılık, Şube bankacılığı, kentsel ekonomik kalkınma, Dinamik GMM

Thanks

Special thanks to Professor Yener Altunbas (Bangor University) and Professor John Thornton (University of East Anglia) for their invaluable contributions during the writing of this paper.

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