Influence on economic growth and banking sector development: In Turkey

The banking sector, which has a significant place in the financial system, is a dynamic sector and the economic growth is important for all countries, making the banks indispensable for modern economies. Banks are the driving force of economic growth by channeling their savings to productive investments. This thesis with development and foreign direct investment inflows in the banking sector in Turkey in the 1960-2017 period in the study of causality between economic growth and long-term relationships were examined. In the study, Zivot-Andrews (1992) unit root test, which allowed only one break to detect the stationarity of the variables, followed by the cointegration test based on the ARDL approach. Finally, Toda and Yamamoto (1995) conducted causality test using the causality test method. According to the ARDL test results, both the banking sector and the FDI inflows have a positive effect on economic growth in the long term. According to Toda Yamamoto test results, it was determined that the banking sector's one-way causality from economic growth to economic growth and economic growth to FDI inflows Key Words: Development of The Banking Sector, Economic Growth, Foreign Direct Investment