Foreign Bank Entry and Evolution of Efficiency: Evidence from Turkish Banking Sector

Öncel A. G., Süer Ö.

GBATA (Global Business And Technology Association) Tenth Annual International Conference, Madrid, Spain, 8 - 12 July 2008, pp.815-822

  • Publication Type: Conference Paper / Full Text
  • City: Madrid
  • Country: Spain
  • Page Numbers: pp.815-822
  • Galatasaray University Affiliated: Yes

Abstract

The recent wave of foreign investment in Turkish banking sector and the existing opportunities for new entrants suggest that foreign banks are likely to play an increasingly important role in Turkey. The aim of this paper is to provide empirical evidence on the evolution of efficiency in the Turkish banking sector following the 2001 financial crisis with a special emphasis on the role of foreign banks. We find that, on average, foreign-owned banks have higher overall efficiency than domestic banking groups, for the period 2002-2006. Furthermore, the overall banking efficiency has increased slightly but consistently during the same period.