The impacts on economic growth of banking sector in Turkey: A review on participation banking and conventional banking

This study was conducted to determine the impact of the banking sector on economic growth in terms of participation banking and conventional banking. The first part of the study examines the banking system. The theoretical basis, historical development and basic functions of banking will be explained. Against this, the Participation Banking system, which is based on profit - loss and interest - free and which constitutes the main subject of the study, is taken into consideration in the second section, the basic principles on which this system is based, the methods of collecting and using funds, and the notion of interest, which is the case that is positioned against itself, is examined. The theoretical basis, historical development and basic functions of banking will be explained. Against this, the Participation Banking system, which is based on profit - loss and interest - free and which constitutes the main subject of the study, is taken into consideration in the second section, the basic principles on which this system is based, the methods of collecting and using funds, and the notion of interest, which is the case that is positioned against itself, is examined. In the third part of the study, the empirical literature on this subject is summarized by looking at the relationship of banking with growth. The concepts of demand follow-up, supply hypothesis and bi-directional causality, which are discussed in the economic literature, in response to the questions of ensel Does financial development affect economic growth or does economic growth trigger the development of finances? In this context Participation Banking and made the world associated with traditional banking systems studies to be analyzed, conclusions will be summarized and these types of banking in Turkey that contribute, such as how economic growth or will be explained qualitatively to offer. At the same time, research methodologies related to other empirical studies on this subject have been classified with the help of the table. In the last part of the study of Participation Banking in Turkey and quarterly data on the effects on the private sector to the economic growth of the loans it has been analyzed with conventional banking econometric models. According to the results, policy proposals were produced and ideas were expressed for other studies. Keywords: Banking System, Participation Banking, Economic Growth, Financial Development, ARDL