Persistence Of Profit In Turkish Banking Firms: Evidence From Panel Lm Tests

Article (PDF Available)inActual Problems of Economics 124(10) · January 2011with 201 Reads 
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Abstract
This paper examines persistence of profit in Turkish banking system for the period 1998:1–2009:4 by focusing both net income after tax to total assets (ROA) and net income after tax to total equity (ROE) as profit measures by utilizing panel LM unit root test. We found that competition among surviving banks is high in the Turkish Banking System for the period 1998:1–2009:4. In addition, when we compare the ROA and ROE results in terms of persistence, competition is higher in Turkish banking system for ROE than ROA.
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  • ... They use unit root tests and find that in the short-run persistence of profits is moderate whereas abnormal profits disappear in the long-run. In a recent paper, Iskenderoglu et al. (2011), investigate the POP hypothesis within the Turkish banking system using quarterly data over the period 1998-2009. They utilize panel unit root tests for eight banks and find no evidence of profit persistence. ...
  • ... There is an extending empirical literature on the persistence of profits in banking sectors (Berger et al., 2000;Gaddard et al., 2004aGaddard et al., , 2004bAgostino et al., 2005;Bektas, 2007;Kaplan and Celik, 2008;Aslan et al., 2011, Goddard et al., 2011Iskenderoglu et al. 2011;Dietrich and Wanzenried, 2012;Kanas et al., 2012;Turgutlu, 2014;Chronopoulos et al., 2015). Among these papers, Bektas (2007), Kaplan and Celik (2008), Aslan et al. (2011), Iskenderoglu et al. (2011), and Turgutlu (2014 investigate the persistence of profitability in the Turkish banking sector. ...
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