In the framework of the asymmetric information theory, the empirical assessment of the impact of the 2008 global financial crisis on the participation banks and the conventional banks in Turkey: ARDL model

The aim of this study is to examine empirically the impact of the global financial crisis on conventional banks and participation banks in Turkey. In this context, using Bounds Test Approach (ARDL Model) on the impact of the crisis of 2008 on participation banks and conventional banks in Turkey, the validity of the proposition that participation banks compared to conventional banks in Turkey are more resistant to global financial crisis of 2008 is tested. In the study, conventional banks and participation banks operating in Turkish banking sector between the years 2005 and 2015 is selected. In the analysis, Bank Asset Profitability has been used as a dependent variable, as to an independent variable, net profit/interest margin, industrial production index and real effective exchange rate values have been used with 3-months periods. In this framework, the analysis with the selected variables for the period 2005-2015, including the 2008 crisis shows that the level that the participation banks and conventional banks have been affected by macroeconomic indicators and market conditions is different, thus both types of banks have been affected at different levels from the 2008 global crisis. While the positive developments in the net interest margin affected the conventional banks more, the industrial production index representing the growth and the exchange rate affected the participation banks more. It is considered that this situation can be explained by the resource and investment constraints that participation banks face, since they have to comply with the norms and principles of participation banking and it is concluded that the financial fluctuations that might affect the real sector will affect the participation banks more than the conventional banks .