Foreign Ownership and Bank Efficiency: Evidence from Turkey

Foreign Ownership and Bank Efficiency: Evidence from Turkey

Özlem Olgu, Emrah Yılmaz
Copyright: © 2014 |Pages: 26
ISBN13: 9781466646353|ISBN10: 1466646357|EISBN13: 9781466646360
DOI: 10.4018/978-1-4666-4635-3.ch006
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MLA

Olgu, Özlem, and Emrah Yılmaz. "Foreign Ownership and Bank Efficiency: Evidence from Turkey." Global Strategies in Banking and Finance, edited by Hasan Dinçer and Ümit Hacioğlu, IGI Global, 2014, pp. 75-100. https://doi.org/10.4018/978-1-4666-4635-3.ch006

APA

Olgu, Ö. & Yılmaz, E. (2014). Foreign Ownership and Bank Efficiency: Evidence from Turkey. In H. Dinçer & Ü. Hacioğlu (Eds.), Global Strategies in Banking and Finance (pp. 75-100). IGI Global. https://doi.org/10.4018/978-1-4666-4635-3.ch006

Chicago

Olgu, Özlem, and Emrah Yılmaz. "Foreign Ownership and Bank Efficiency: Evidence from Turkey." In Global Strategies in Banking and Finance, edited by Hasan Dinçer and Ümit Hacioğlu, 75-100. Hershey, PA: IGI Global, 2014. https://doi.org/10.4018/978-1-4666-4635-3.ch006

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Abstract

This chapter examines the association between Foreign Direct Investment (FDI) and efficiency of commercial banks in Turkey during the 2003-2010 period. First, the authors examine the technical efficiency of banks by applying the Data Envelopment Analysis (DEA) and financial ratio analysis following the relevant literature. Then, they attempt to shed light on the relationship between FDI and bank efficiency applying a second stage regression analysis. The results indicate that banks that have received FDI are more efficient than others whilst there is no significant correlation among the FDI dummy and bank efficiency in Turkey. Moreover, the analysis of balance sheet ratios suggests that foreign investors target more profitable and larger banks in the sector to form partnerships. Thus, consistent with Berger et al. (2003), the authors propose that efficiency is a pre-condition rather than a result of FDI in the Turkish banking sector.

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