Impact of Ownership Concentration on the Profitability of the Banking Sector: The Case of Turkey

Tuba Özkan (), Sevgi Cengız and Mehmet Emin Karabayır
Additional contact information
Tuba Özkan: Atatürk University
Sevgi Cengız: Kafkas University
Mehmet Emin Karabayır: Kafkas University

A chapter in New Dynamics in Banking and Finance, 2022, pp 1-14 from Springer

Abstract: Abstract Ownership density, which is one of the indicators of ownership structure, refers to the fact that the majority of the shares are held by one person or by a small number of people. As the share of the stockholder increases, the density of ownership increases, while the density of ownership decreases as the share ratio decreases.Studies examining the relationship between ownership density and profitability have found both positive and negative relationships between the two. The allegations of these studies generally center around the claim that the person or group holding the largest share makes effort to maximize self-interest, thanks to the control of power, and that indirectly this effort is reflected in the overall profitability of the company. Those who obtain the opposite results, on the other hand, claim that the person or persons who hold the majority shares protect their interests by changing profit distribution policies and that these changes indirectly have a negative effect on the general profitability of the minority shareholders and the company. In this context, this study aims to determine the impact of ownership density on the profitability of 16 Turkish commercial banks operated uninterruptedly between the 2009 and 2019 period with a data set of 187 firm-year observations. Return on assets (ROA) and return on equity (ROE) are used as proxies for profitability, and the equity share of the largest shareholder is used as a proxy for ownership density. In addition, bank age and bank size are included in the analysis as control variables and domestic/foreign ownership as a dummy variable.

Keywords: Banking sector; Profitability; Ownership concentration (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:prbchp:978-3-030-93725-6_1

Ordering information: This item can be ordered from
http://www.springer.com/9783030937256

DOI: 10.1007/978-3-030-93725-6_1

Access Statistics for this chapter

More chapters in Springer Proceedings in Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().