The effects of participation banks on the Turkish economy

Economic growth is an important concept for countries. The stability of this situation is more important than the statistical increase in economic growth over the years. In recent years, countries have begun to give more weight to financial markets in the policies adopted and implemented by their decision makers for their economies. Banks, which are indispensable elements of financial markets, also have direct effects here. The fact that financial markets are among the main causes of macro and micro-scale crises in recent years is effective in increasing the weight here. Within the financial markets, Participation Banks have been active in places where Muslims are dominant in the last 20-25 years, and they are active even in places where they are a minority. It is important for the economies of the countries to use the resources effectively and to transfer the idle funds to the economy. In the study, Johansen Co-Integration test and Granger Causality tests were applied to this question on the sample of Turkey, based on quarterly data for the years 2010 and 2020. Financing, time and demand deposits, total assets provided in Participation Banks are compared with the Gross Domestic Product (GDP), which is taken as the basic indicator in the national economy. As a result of the tests applied, a long-term cointegration relationship was determined between the variables, and one-way causality in loans to GDP and one-way causality from GDP and loans to deposits were determined.