This study examines the global financial factors affecting the credit expansion of Turkish banks, in other words, the existence of international bank-lending channel during the 2002-2018 period. We also analyze the impact of bank-specific characteristics on credit expansion in Turkey in this study. In this empirical study, we use bank level annual data and estimate our dynamic model using the GMM method. Estimation results indicate that volatility indices for the USA (VXO) and policy rates of ECB and FED are significant in explaining credit expansion in Turkey. Our findings confirm the existence of international bank-lending channel in Turkey rather than the classical bank lending channel. In addition, our findings show that bank capital adequacy ratios are important in explaining credit expansion. Our findings align with the literature suggesting that in analyzing risk taking channels in emerging markets, risk-taking behavior of advanced countries and global financial condition should be taken into account.
Key words: International Bank Lending Channel, Generalized Methods of Moments, Turkish Banking Sector, Global Factors, Bank Heterogeneity. JEL Classification: C23, E44, F30 Article Language: EnglishTurkish
|
