Essays on determinants of efficiency for commercial banks in Turkey

Abstract

The main motivation of this study is to assess potential determinants of bank efficiency in commercial banks operating in Turkey for post crisis period. Post crisis period is taken only in order to catch the macro economic homogeneity. Hence banks will be able to focus on the bank specific characteristics to improve their performances. Two-step procedure is applied as the methodology in which efficiency scores calculated in the first step are regressed on certain variables to see their affect on bank performance. Recently, the banks shifted their resources to alternative ways of banking like other earning asset and off balance sheet items. Hence we attempt to understand how these changes in commercial banks’ operations affect their efficiencies. In the first part of this study interbank funds will be concentrated on as an untraditional way of banking. In the second part, the components of off balance sheet items will be assessed whether their increasing volume improves bank performance. In the last chapter, certain bank specific variables are regressed on the efficiency scores with a focus on size variables in order to see if increasing bank size contributes to scale economies.