Faculty Scholarship 1994 - Present

Ownership, Deregulation and Productivity Developments in Banking: The Case of Turkey

This paper examines productivity developments in public, private, and foreign banks operating in Turkey over the initial post-liberalization period. Using the Dea-type Malmquist index approach, it also explores the contributions of technological change, efficiency change and scale change to productivity growth. The results show that productivity growth in the banking sector conincided with promotion of liberal policies. The major source of productivity gains is scale changes for public banks and efficiency changes for (domestic or foreign) private banks. In terms of productivity growth, foreign banks strongly dominate domestic banks and there are no observed advantages accruing to larger banks.