Profitability effects of financial globalization in an emerging market banking industry: insights into Turkey

Ece C. Akdo?an () and Ekin Ayºe Özºuca ()
Additional contact information
Ece C. Akdo?an: Çankaya University, Department of Banking and Finance, Mimar Sinan Cd. 4, 06790 Ankara, Turkey
Ekin Ayºe Özºuca: Çankaya University, Department of Banking and Finance, Mimar Sinan Cd. 4, 06790 Ankara, Turkey

Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, 2019, vol. 37, issue 1, 303-325

Abstract: The massive financial liberalization followed by accelerating financial globalization leaded to significant structural changes in the financial sector. Since financial institutions play a dominant role in functioning of financial sector, especially in emerging markets where banking industries are generally among the most sensitive sectors to increased interconnectedness of financial markets, how financial globalization actually affects the efficiency of financial intermediation is a vital question. However, although there exists plenty of research focusing on financial integration, impacts of financial globalization is untouched. Hence, this study investigates the bank profitability effects of financial globalization through focusing on an emerging market, Turkey and searches for any potential differences that may prevail among banks with different ownership structures. The findings indicate that while the market based profitability measures improve with financial globalization, the accounting based measures deteriorate pinpointing to an over optimism in the market which in turn brings in mispricing problems. Besides, ownership structure is found to affect the market based measures where banks with domestic and private ownerships are found to benefit more. However, since no significant distinction could be detected among any of the ownership compositions for accounting based profitability measures, such misappraisals seem to foster the optimism in the market.

Keywords: financial globalization; banking industry; market and accounting based profitability; ownership structure; emerging markets (search for similar items in EconPapers)
JEL-codes: C23 F61 F65 G21 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.efri.uniri.hr/upload/Zbornik_1_2019/13-Akdogan%20et%20al-2019-1.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rfe:zbefri:v:37:y:2019:i:1:p:303-325

Access Statistics for this article

More articles in Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics from University of Rijeka, Faculty of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Danijela Ujcic ().