Impact of Banking Sector Credits on Net Sme Formation in Turkey

Abstract

Purpose: This study examines the impact of banking sector credit on the growth of small and medium enterprises in Turkey. The main objective of the study is to investigate whether state-equity bank group or private-equity bank group credits have significant impact on the growth of net Small and Medium Enterprise (SME) formation a regional, urban and sectoral basis. Methodology: As part of the methodology, quarterly data between 2010-2019 was collected and used in the study for Panel Cointegration Model. Findings: The formulated hypotheses reveal that private-equity bank credits have significant impact on the growth of small and medium enterprises in Turkey. For statistical region segmentation, city segmentation and sectoral segmentation, private equity bank group credit coefficient is higher than state equity bank group. LPCT (private equity bank group city based logarithmic total credits) variable has a higher coefficient than LSCT (state equity bank group city based logarithmic total credits) variable. Originality: During literature review, no work with these variables could be found. This work is expected to fill a gap in the literature.