Investigating the Relationship Between the Banking Sector and Capital Market Variables in Turkiye Using Toda-Yamamoto Causality Analysis

Murat Karakaya and Sadiye Oktay

Journal of BRSA Banking and Financial Markets, 2024, vol. 18, issue 1, 19-36

Abstract: The banking sector and the capital market are among the fundamental components of the financial system. This study aims to investigate whether there is a relationship between the banking sector and the capital market in Turkiye. Data representing the banking sector, including assets, loans, deposits, branches, personnel and profits, as well as data representing the capital market, including BIST total market value, BIST 100 Index and total trading volume, were compiled for the period from January 2002 to April 2023, and a Toda-Yamamoto causality analysis was performed. The research findings indicate a two-way causal relationship between the banking sector and the capital market. This result contributes to understanding how the interconnected structure of the financial system and its components influence each other.

Keywords: Banking Sector; Capital Market; Borsa Istanbul; Toda-Yamamoto Causality Test (search for similar items in EconPapers)
JEL-codes: C32 G10 G14 G21 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:bdd:journl:v:18:y:2024:i:1:p:19-36

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