The Turkish Banking Sector and Regional Economic Growth

  • Yener Altunbaş
  • Alper Kara
  • Özlem Olgu
Part of the Palgrave Macmillan Studies in Banking and Financial Institutions book series (SBFI)


In previous chapters we have covered the rapid development of Turkish banking, its structure, efficiency, Turkey’s financial crises and the country’s economic developments. No doubt macroeconomic instability, chronic high inflation, political conflicts and financial crises constituted an impediment to economic growth but, despite these obstacles, the Turkish economy and banking sector have grown. The total assets of the Turkish banking sector increased by around 300 per cent, from USD 60 billion to 180 billion between 1990 and 2003. In recent years, there has been an increased amount of interest in the relationship between financial development and economic growth. The issue of finance and growth has been researched globally, but different outcomes have arisen from researches. In this chapter, we aim to take the literature a step further, by linking the development of financial institutions, which are mainly represented by the banking industry, to the economic development that Turkey has experienced recently. However, unlike cross-country studies, we use provincial data to examine the relationship between financial development and economic growth in Turkey’s provinces between 1990 and 2003. First, we offer a brief review of the extensive literature on financial and economic development, then introduce our data and methodology, and later present our results with a discussion.


Economic Growth Commercial Bank Financial Development Banking Sector Financial Intermediation 
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Copyright information

© Yener Altunbaş, Alper Kara and Özlem Olgu 2009

Authors and Affiliations

  • Yener Altunbaş
    • 1
  • Alper Kara
    • 2
  • Özlem Olgu
    • 3
  1. 1.Business SchoolBangor UniversityWales, UK
  2. 2.The Business SchoolLoughborough UniversityLoughboroughUK
  3. 3.Koç UniversityIstanbulTurkey

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