Effects of conventional and participation banks on economic growth: Comparatively empirical analyses evidence from Turkey

The concept of economic growth, which has become one of the important subject after the Industrial Revolution, has been particularly important for developing countries such as Turkey. The development in liberty and legal order and institutions in developing countries, have made the economic growth which has direct influence with many areas even more important. In this study, we look at the notion of economic growth from the case of Turkey, relationship of economic growth and banking institutions are examined, participation banks and conventional banks are approached from a more specific angle. Using the quarterly data between 2006 and 2017, to measure the effects of the banks on the financial system the credit volume data of the conventional and participating banks and for the economic growth the GDP figures were used. Series tested by Adf unit root test, structural breaking points were determined by the Zivot - Andrews test. There is no evidence of long term cointegration relationship between the Johansen cointegration test variables. The relationship was not found to be related to the one-way or two-way causality in the long run with Granger causality test.