Financial fragilities of Turkish non-financial sectors

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Tezin Türü: Yüksek Lisans

Tezin Yürütüldüğü Kurum: Orta Doğu Teknik Üniversitesi, İktisadi ve İdari Bilimler Fakültesi, İktisat Bölümü, Türkiye

Tezin Onay Tarihi: 2014

Öğrenci: ABDURRAHMAN KILIÇ

Danışman: ERDAL ÖZMEN

Özet:

This thesis investigates financial structure of Turkish non-financial sectors and the impacts of their financial fragilities on profitability using the Central Bank of the Republic of Turkey (CBRT) sector level company accounts data base. The results suggest that corporate sector leverage dramatically increased after 2009. Despite the improvements in maturity and liability dollarization of the corporate sector, fragilities still appear to be substantially high. Foreign currency denominated assets have become far from being adequate to hedge dollarized debts. Liability dollarization of the corporate sector is funded heavily by domestic banking system and external loans. Empirical results from the dynamic panel data GMM models suggest that corporate sector’s profitability decreases with indebtedness and real interest rates and increases with export share for non-financial sectors. Real exchange rate appreciation tends to increase profitability for non-financial and manufacturing sectors with lower export ratios due to the availability of foreign exchange denominated funds with lower costs. The impact of appreciation is, however, negative for the sectors with higher export ratios suggesting that the trade and competitiveness channels dominate. The negative impact of leverage ratio tent to decrease and positive impact of appreciation tend to increase with the average firm size of the sectors.