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The Effect of Inflation on Fund Supply of Participation Banks: An Application to Türkiye with ARDL Approach

Year 2024, , 27 - 38, 31.01.2024

Caner Dilber , Mercan Hatipoğlu

https://doi.org/10.37880/cumuiibf.1293144

Abstract

The primary economic variable that threatens price stability is inflation. Since inflation directly affects the quality of life standards of every individual living in a country, it is one of the most important problems for economies. The aim of this study is to investigate the effect of inflation on the fund supply of participation banks. The relationship between the amount of funds offered to the market by participation banks operating in Turkey and the CPI values were analyzed at monthly frequency for the period between of 2012-2022. In order to determine the stationary of the series, the structural break ADF unit root test were used and ARDL were preferred as the estimation model. According to the results of the analysis, inflation affects the fund supply of participation banks negatively in the short term. On the other hand, a positive significant relationship between inflation and participation banks fund supply was found in the long run. All in all in an inflationary environment, the loans offered by the participation banks to the markets follow a U-shaped trend, first decreasing and then increasing and increases in inflation rates threaten the credit growth of participation banks. In addition, we pointed out that it is a necessity to bring inflation rates to a modarate level so that participation banks are not excluded from financial markets in Turkey.

Keywords

Participation Banks Inflation Fund Supply ARDL Model.

References

  • Adımlı, T. & Telatar, O. M. (2022). Bireysel kredi türlerinin tüketici fiyat endeksine etkisi: Türkiye ekonomisi üzerine ampirik bir çalışma, Finansal Araştırmalar ve Çalışmalar Dergisi, Vol.14 No. 26, pp. 1-17. Arslan, İ. & Yaprakli, S. (2008). Banka kredileri ve enflasyon arasindaki ilişki: Türkiye üzerine ekonometrik bir analiz (1983-2007), Istanbul University Econometrics and Statistics e-Journal, Vol. 0 No.7, pp. 88-103.
  • Ayagre, P., Dzeha, G., Kriese, M. & Kusi, B. (2022). What drives bank lending? A closer look at bank lending types in Africa, African Journal of Economic and Management Studies. Vol. 13 No. 2, pp. 236-250.
  • Bandura, W. N. (2022). Inflation and finance-growth nexus in Sub-Saharan Africa, Journal of African Business, Vol. 23 No. 2 pp. 422-434.
  • Batayneh, K., Al Salamat, W. & Momani, M. Q. (2021). The impact of inflation on the financial sector development: Empirical evidence from Jordan, Cogent Economics & Finance, Vol. 9 No. 1.
  • Bittencourt, M. (2011). Inflation and financial development: Evidence from Brazil, Economic Modelling, Vol. 28 No. 1-2, pp. 91-99.
  • Boyd, J. H. & Champ, B. (2006). Inflation, Banking, and Economic Growth , Federal Reserve Bank of Cleveland, Economic Commentary, pp.1-4.
  • Boyd, J. H., Levine, R. & Smith, B. D. (2001). The impact of inflation on financial sector performance, Journal of Monetary Economics, Vol. 47 No. 2, pp.221-248.
  • Burdekin, R. C. & Tao, R. (2011). Bank lending, inflation, and China s stock market (2004–2010), Economics Research Internationa. Vol. 2011, pp. 1-7.
  • Çağlar, A. E. (2015). Yapısal kırılmalı birim kök testlerinin küçük örneklem özelliklerinin karşılaştırılması (Master s thesis, Pamukkale University Institute of Social Sciences).
  • Çatik, A. N. & Karaçuka, M. (2012). The bank lending channel in Turkey: has it changed after the low-inflation regime?. Applied Economics Letters, 19(13), 1237-1242.
  • Caglayan, M. & Xu, B. (2016). Inflation volatility effects on the allocation of bank loans, Journal of Financial Stability, Vol. 24, pp. 27-39.
  • Chaibi, H. & Ftiti, Z. (2015). Credit risk determinants: Evidence from a cross-country study, Research in International Business and Finance, Vol. 33, pp. 1-16.
  • Çatik, A. N. & Karaçuka, M. (2012). The bank lending channel in Türkiye: has it changed after the low-inflation regime?, Applied Economics Letters, Vol. 19 No. 13, pp. 1237-1242.
  • Demiralp, S. & Demiralp, S. (2019). Erosion of central bank independence in Türkiye, Turkish Studies, Vol. 20 No. 1, pp. 49-68.
  • Demirgüç-Kunt, A. & Detragiache, E. (1998). The determinants of banking crises in developing and developed countries, IMF Economic Review, Vol. 45 No. 1, pp. 81-109.
  • Dogan, S. & Sarsel, Y. (1996). Enflasyonun bankacılık sektörü üzerine etkileri ve Türk bankacılık sektörüne bir bakış . Türkiye Bankalar Birliği: Ankara.
  • Ehigiamusoe, K. U., Narayanan, S. & Poon, W. C. (2021). Revisiting the role of inflation in financial development: unveiling non-linear and moderating effects, Asia-Pacific Journal of Business Administration, Vol. 14 No. 3, pp. 380-401.
  • Engle, R. F. & Granger, C. W. (1987). Co-integration and error correction: representation, estimation, and testing. Econometrica, 251-276.
  • English, W. B. (1999). Inflation and financial sector size, Journal of Monetary Economics, Vol. 44 No. 3, pp. 379-400.
  • Esenyel, N.M. (2017). Türkiye de enerji yakınsama hipotezinin sınanması: Yapısal kırılmalı birim kök analizi, Social Sciences Research Journal, Vol. 6 No. 3, pp. 42-52.
  • Gezer, M.A. & R. Kılıc (2020). Türkiye’de finansal istikrarın reel ekonomiye etkisi: Doğrusal ve doğrusal olmayan ARDL modellemelerine dayalı olarak, Sosyoekonomi, Vol. 28 No. 46, pp.117-140.
  • Huang, H. C., Lin, S. C., Kim, D. H. & Yeh, C. C. (2010). Inflation and the finance–growth nexus, Economic Modelling, Vol. 27 No. 1, pp. 229-236.
  • İnan, E. A. (2000). Dezenflasyon programının Türk bankacılık sistemine olası etkileri, Bankacılar Dergisi, Vol. 32, pp. 1-17.
  • Johansen, S. Juselius, K., (1990), Maximum likelihood estimation and inferences on cointegration with application to the demand for money, Oxford Bulletin of Economics and Statistics. 52, 169-210.
  • Kagochi, J. (2019). Inflation and financial sector development in Sub-Saharan African countries, Journal of Economic Studies, Vol. 46 No. 4, pp. 798-811.
  • Kantur, Z. & Özcan, G. (2022). Dissecting Turkish inflation: theory, fact, and illusion, Economic Change and Restructuring, Vol. 55 No. 3, pp. 1543-1553.
  • Karagöl, E., Erbaykal, E. & Ertuğrul, H.M. (2007). Türkiye de ekonomik büyüme ile elektrik tüketimi ilişkisi: Sınır testi yaklaşımı, Doğuş University Journal, Vol. 8 No. 1, pp. 72-80.
  • Moyo, D. & Tursoy, T. (2020). Impact of inflation and exchange rate on the financial performance of commercial banks in South Africa, Journal of Applied Economic Sciences, Vol. 10 No. 69, pp. 626-635.
  • Narayan, P.K. (2005). The saving and investment nexus for China: Evidence from cointegration tests, Applied Economics, 37(17), 1979-1990.
  • Nazlioglu, Ş., Kayhan S. & Adıguzel, U. (2013). Electricity consumption and economic growth in Türkiye: Co-integration and nonlinear Granger Causality, Economics, Planning, and Policy, Vol. 9 No. 4, pp. 315-324.
  • Nazlioglu, Ş. (2011). World oil and agricultural commodity prices: Evidence from nonlinear causality , Energy Policy, Vol. 39 No. 5, pp. 2935-2943.
  • Pan, H. & Wang, C. (2022). Determinants of bank lending: is there a threshold effect? , Applied Economics Letters, pp. 1-4.
  • Pesaran M.H. & Shin Y. (1999). An autoregressive distributed lag modeling approach to co-integration analysis, In: Strom, S., Holly, A., Diamond, P. (Eds.), Centennial Volume of Rangar Frisch, Cambridge University Press, Cambridge.
  • Rousseau, P. L. & Wachtel, P. (2001). Inflation, financial development and growth. In economic theory, dynamics and markets, Springer, Boston, MA pp. 309-324.
  • Santoni, G. J. (1986). The effects of inflation on commercial banks , Federal Reserve Bank of St. Louis Review, Vol. 68 No. 3, pp. 15-26.
  • Tabash, M. I., Abdulkarim, F. M., Akinlaso, M. I. & Dhankar, R. S. (2022). Islamic banking and economic growth: Fresh insights from Nigeria using autoregressive distributed lags (ARDL) approach, African Journal of Economic and Management Studies, Vol. 13 No. 4, pp. 582-597.
  • Tan, Y. & Floros, C. (2012). Bank profitability and inflation: the case of China, Journal of Economic Studies, Vol. 39 No. 6, pp. 675-696.
  • Tang, T. C. (2001). Bank lending and inflation in Malaysia: Assessment from unrestricted error‐correction models, Asian Economic Journal, Vol. 15 No. 3, pp. 275-289.
  • Tinoco-Zermeno, M. Á., Torres-Preciado, V. H. & Venegas-Martínez, F. (2022). Inflation and bank credit, Investigación Administrativa, Vol. 51 No. 129, pp. 1-21.
  • Tinoco-Zermeno, M. A., Venegas-Martínez, F. & Torres-Preciado, V. H. (2014). Growth, bank credit, and inflation in Mexico: evidence from an ARDL-bounds testing approach, Latin American Economic Review, Vol. 23 No. 1, pp. 1-22.
  • Wahid, A. N., Shahbaz, M. & Pervaz, A. Z. İ. M. (2011). Inflation and financial sector correlation: The case of Bangladesh, International Journal of Economics and Financial Issues, Vol. 1 No. 4, pp. 145-152.
  • Yılancı, V. (2009). Yapısal kırılmalar altında Türkiye için işsizlik histerisinin sınanması, Doğuş University Journal, Vol. 10 No. 2, pp. 324-335.
  • Zivot, E. & Andrews, D.W. (1992). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis, Journal of Business & Economic Statistics, Vol. 10 No. 3, pp. 251-270.

Enflasyonun Katılım Bankalarının Fon Arzı Üzerindeki Etkisi: ARDL Yaklaşımı ile Türkiye Üzerine Bir Uygulama

Year 2024, , 27 - 38, 31.01.2024

Caner Dilber , Mercan Hatipoğlu

https://doi.org/10.37880/cumuiibf.1293144

Abstract

Fiyat istikrarını tehdit eden temel ekonomik değişken enflasyondur. Enflasyon, bir ülkede yaşayan her bireyin yaşam standartlarının kalitesini doğrudan etkilediği için ekonomiler için en önemli sorunlardan biridir. Bu çalışmanın amacı, enflasyonun katılım bankalarının fon arzı üzerindeki etkisini araştırmaktır. Türkiye'de faaliyet gösteren katılım bankalarının piyasaya arz ettikleri fon tutarları ile TÜFE değerleri arasındaki ilişki 2012-2022 dönemi için aylık frekansta incelenmiştir. Serilerin durağanlığını belirlemek için yapısal kırılmalı ADF birim kök testi kullanılmış ve tahmin modeli olarak ARDL tercih edilmiştir. Analiz sonuçlarına göre enflasyon kısa vadede katılım bankalarının fon arzını olumsuz etkilemektedir. Diğer taraftan, enflasyon ile katılım bankaları fon arzı arasında uzun dönemde pozitif yönde anlamlı bir ilişki bulunmuştur. Sonuç olarak, enflasyonist bir ortamda katılım bankalarının piyasalara kullandırdıkları krediler U-şeklinde önce azalan, sonra artan bir seyir izlemekte ve enflasyon oranlarındaki artışlar katılım bankalarının kredi büyümesini tehdit etmektedir. Bütün bunlara ek olarak çalışmanın sonuçları Türkiye’de katılım bankalarının finansal piyasaların dışında kalmaması için enflasyon oranlarının ılımlı bir düzeye getirilmesinin gerekliliğine işaret etmektedir.

Keywords

Katılım Bankaları Enflasyon Fon Arzı ARDL Model

References

  • Adımlı, T. & Telatar, O. M. (2022). Bireysel kredi türlerinin tüketici fiyat endeksine etkisi: Türkiye ekonomisi üzerine ampirik bir çalışma, Finansal Araştırmalar ve Çalışmalar Dergisi, Vol.14 No. 26, pp. 1-17. Arslan, İ. & Yaprakli, S. (2008). Banka kredileri ve enflasyon arasindaki ilişki: Türkiye üzerine ekonometrik bir analiz (1983-2007), Istanbul University Econometrics and Statistics e-Journal, Vol. 0 No.7, pp. 88-103.
  • Ayagre, P., Dzeha, G., Kriese, M. & Kusi, B. (2022). What drives bank lending? A closer look at bank lending types in Africa, African Journal of Economic and Management Studies. Vol. 13 No. 2, pp. 236-250.
  • Bandura, W. N. (2022). Inflation and finance-growth nexus in Sub-Saharan Africa, Journal of African Business, Vol. 23 No. 2 pp. 422-434.
  • Batayneh, K., Al Salamat, W. & Momani, M. Q. (2021). The impact of inflation on the financial sector development: Empirical evidence from Jordan, Cogent Economics & Finance, Vol. 9 No. 1.
  • Bittencourt, M. (2011). Inflation and financial development: Evidence from Brazil, Economic Modelling, Vol. 28 No. 1-2, pp. 91-99.
  • Boyd, J. H. & Champ, B. (2006). Inflation, Banking, and Economic Growth , Federal Reserve Bank of Cleveland, Economic Commentary, pp.1-4.
  • Boyd, J. H., Levine, R. & Smith, B. D. (2001). The impact of inflation on financial sector performance, Journal of Monetary Economics, Vol. 47 No. 2, pp.221-248.
  • Burdekin, R. C. & Tao, R. (2011). Bank lending, inflation, and China s stock market (2004–2010), Economics Research Internationa. Vol. 2011, pp. 1-7.
  • Çağlar, A. E. (2015). Yapısal kırılmalı birim kök testlerinin küçük örneklem özelliklerinin karşılaştırılması (Master s thesis, Pamukkale University Institute of Social Sciences).
  • Çatik, A. N. & Karaçuka, M. (2012). The bank lending channel in Turkey: has it changed after the low-inflation regime?. Applied Economics Letters, 19(13), 1237-1242.
  • Caglayan, M. & Xu, B. (2016). Inflation volatility effects on the allocation of bank loans, Journal of Financial Stability, Vol. 24, pp. 27-39.
  • Chaibi, H. & Ftiti, Z. (2015). Credit risk determinants: Evidence from a cross-country study, Research in International Business and Finance, Vol. 33, pp. 1-16.
  • Çatik, A. N. & Karaçuka, M. (2012). The bank lending channel in Türkiye: has it changed after the low-inflation regime?, Applied Economics Letters, Vol. 19 No. 13, pp. 1237-1242.
  • Demiralp, S. & Demiralp, S. (2019). Erosion of central bank independence in Türkiye, Turkish Studies, Vol. 20 No. 1, pp. 49-68.
  • Demirgüç-Kunt, A. & Detragiache, E. (1998). The determinants of banking crises in developing and developed countries, IMF Economic Review, Vol. 45 No. 1, pp. 81-109.
  • Dogan, S. & Sarsel, Y. (1996). Enflasyonun bankacılık sektörü üzerine etkileri ve Türk bankacılık sektörüne bir bakış . Türkiye Bankalar Birliği: Ankara.
  • Ehigiamusoe, K. U., Narayanan, S. & Poon, W. C. (2021). Revisiting the role of inflation in financial development: unveiling non-linear and moderating effects, Asia-Pacific Journal of Business Administration, Vol. 14 No. 3, pp. 380-401.
  • Engle, R. F. & Granger, C. W. (1987). Co-integration and error correction: representation, estimation, and testing. Econometrica, 251-276.
  • English, W. B. (1999). Inflation and financial sector size, Journal of Monetary Economics, Vol. 44 No. 3, pp. 379-400.
  • Esenyel, N.M. (2017). Türkiye de enerji yakınsama hipotezinin sınanması: Yapısal kırılmalı birim kök analizi, Social Sciences Research Journal, Vol. 6 No. 3, pp. 42-52.
  • Gezer, M.A. & R. Kılıc (2020). Türkiye’de finansal istikrarın reel ekonomiye etkisi: Doğrusal ve doğrusal olmayan ARDL modellemelerine dayalı olarak, Sosyoekonomi, Vol. 28 No. 46, pp.117-140.
  • Huang, H. C., Lin, S. C., Kim, D. H. & Yeh, C. C. (2010). Inflation and the finance–growth nexus, Economic Modelling, Vol. 27 No. 1, pp. 229-236.
  • İnan, E. A. (2000). Dezenflasyon programının Türk bankacılık sistemine olası etkileri, Bankacılar Dergisi, Vol. 32, pp. 1-17.
  • Johansen, S. Juselius, K., (1990), Maximum likelihood estimation and inferences on cointegration with application to the demand for money, Oxford Bulletin of Economics and Statistics. 52, 169-210.
  • Kagochi, J. (2019). Inflation and financial sector development in Sub-Saharan African countries, Journal of Economic Studies, Vol. 46 No. 4, pp. 798-811.
  • Kantur, Z. & Özcan, G. (2022). Dissecting Turkish inflation: theory, fact, and illusion, Economic Change and Restructuring, Vol. 55 No. 3, pp. 1543-1553.
  • Karagöl, E., Erbaykal, E. & Ertuğrul, H.M. (2007). Türkiye de ekonomik büyüme ile elektrik tüketimi ilişkisi: Sınır testi yaklaşımı, Doğuş University Journal, Vol. 8 No. 1, pp. 72-80.
  • Moyo, D. & Tursoy, T. (2020). Impact of inflation and exchange rate on the financial performance of commercial banks in South Africa, Journal of Applied Economic Sciences, Vol. 10 No. 69, pp. 626-635.
  • Narayan, P.K. (2005). The saving and investment nexus for China: Evidence from cointegration tests, Applied Economics, 37(17), 1979-1990.
  • Nazlioglu, Ş., Kayhan S. & Adıguzel, U. (2013). Electricity consumption and economic growth in Türkiye: Co-integration and nonlinear Granger Causality, Economics, Planning, and Policy, Vol. 9 No. 4, pp. 315-324.
  • Nazlioglu, Ş. (2011). World oil and agricultural commodity prices: Evidence from nonlinear causality , Energy Policy, Vol. 39 No. 5, pp. 2935-2943.
  • Pan, H. & Wang, C. (2022). Determinants of bank lending: is there a threshold effect? , Applied Economics Letters, pp. 1-4.
  • Pesaran M.H. & Shin Y. (1999). An autoregressive distributed lag modeling approach to co-integration analysis, In: Strom, S., Holly, A., Diamond, P. (Eds.), Centennial Volume of Rangar Frisch, Cambridge University Press, Cambridge.
  • Rousseau, P. L. & Wachtel, P. (2001). Inflation, financial development and growth. In economic theory, dynamics and markets, Springer, Boston, MA pp. 309-324.
  • Santoni, G. J. (1986). The effects of inflation on commercial banks , Federal Reserve Bank of St. Louis Review, Vol. 68 No. 3, pp. 15-26.
  • Tabash, M. I., Abdulkarim, F. M., Akinlaso, M. I. & Dhankar, R. S. (2022). Islamic banking and economic growth: Fresh insights from Nigeria using autoregressive distributed lags (ARDL) approach, African Journal of Economic and Management Studies, Vol. 13 No. 4, pp. 582-597.
  • Tan, Y. & Floros, C. (2012). Bank profitability and inflation: the case of China, Journal of Economic Studies, Vol. 39 No. 6, pp. 675-696.
  • Tang, T. C. (2001). Bank lending and inflation in Malaysia: Assessment from unrestricted error‐correction models, Asian Economic Journal, Vol. 15 No. 3, pp. 275-289.
  • Tinoco-Zermeno, M. Á., Torres-Preciado, V. H. & Venegas-Martínez, F. (2022). Inflation and bank credit, Investigación Administrativa, Vol. 51 No. 129, pp. 1-21.
  • Tinoco-Zermeno, M. A., Venegas-Martínez, F. & Torres-Preciado, V. H. (2014). Growth, bank credit, and inflation in Mexico: evidence from an ARDL-bounds testing approach, Latin American Economic Review, Vol. 23 No. 1, pp. 1-22.
  • Wahid, A. N., Shahbaz, M. & Pervaz, A. Z. İ. M. (2011). Inflation and financial sector correlation: The case of Bangladesh, International Journal of Economics and Financial Issues, Vol. 1 No. 4, pp. 145-152.
  • Yılancı, V. (2009). Yapısal kırılmalar altında Türkiye için işsizlik histerisinin sınanması, Doğuş University Journal, Vol. 10 No. 2, pp. 324-335.
  • Zivot, E. & Andrews, D.W. (1992). Further evidence on the great crash, the oil-price shock, and the unit-root hypothesis, Journal of Business & Economic Statistics, Vol. 10 No. 3, pp. 251-270.
There are 43 citations in total.

Details

Primary Language English
Subjects Economics
Journal Section Makaleler
Authors

Caner Dilber 0000-0002-2648-925X

Mercan Hatipoğlu 0000-0003-3307-5458

Early Pub Date January 26, 2024
Publication Date January 31, 2024
Submission Date May 5, 2023
Published in Issue Year 2024

Cite

APA Dilber, C., & Hatipoğlu, M. (2024). The Effect of Inflation on Fund Supply of Participation Banks: An Application to Türkiye with ARDL Approach. Cumhuriyet Üniversitesi İktisadi Ve İdari Bilimler Dergisi, 25(1), 27-38. https://doi.org/10.37880/cumuiibf.1293144

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