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Corporate Sector Financial Structure in Turkey: A Descriptive Analysis

Halil Aydin, Cafer Kaplan, Mehtap Kesriyeli, Erdal Ozmen (), Cihan Yalcin and Serkan Yigit

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: This paper presents and discusses some stylised facts of the corporate sector financial structure in Turkey using the Company Sector Accounts compiled by the Central Bank of the Republic of Turkey (CBRT). The findings of the paper suggest that non-financial firms in Turkey have been heavily exposed almost all of the basic balance sheet risks. The corporate sector appears to be excessively leveraged with relatively lower asset tangibility creating also a credit risk for the lenders. The firms rely heavily on foreign currency denominated and short-term debt instruments making them vulnerable to both exchange rate and interest rate shocks through currency and maturity mismatches. The corporate sector can be characterised as financially constrained as the deepening of the Turkish bank-based financial system is rather low and the bank credits to the private sector tend to be crowded out by the mode of domestic debt finance. The corporate sector vulnerabilities to maturity, interest rate and currency risks are found to be improving with the firm size. With the relatively stable macroeconomic environment and stricter prudential regulation on the financial system, the corporate sector balance sheet risks, albeit still are at high levels, tend to be improving after the financial crisis of 2001.

Keywords: Balance sheets; Capital structure; Corporate sector; Debt composition; Financial crowding-out; Liability dollarisation; Turkey (search for similar items in EconPapers)
JEL-codes: E22 F31 G32 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-cwa and nep-fmk
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:tcb:wpaper:0607

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