The Effect of Household versus Enterprise Credit on Economic Growth in Turkiye

Betül İsmiç; Sedef Şen

doi:10.37880/cumuiibf.1331347

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The Effect of Household versus Enterprise Credit on Economic Growth in Turkiye

Öz

Although theoretical predictions suggest distinct impacts of household and enterprise credit on the economy, the empirical literature has predominantly relied on aggregate indicators of total bank lending to the private sector. This study aims to empirically assess the effects of total bank credit on the private sector as well as enterprise (or business) and household credit markets on economic growth. The empirical study is based on a time series approach called ARDL cointegration to reveal the long and short-run relationships between related variables. An annual time series data from 1986 to 2021 is applied for Turkiye. Empirical results show that enterprise credit has a positive impact on economic growth, whereas household credit does not affect economic growth. The findings also show that the total amount of banking credit given to the private sector does not affect economic growth. Furthermore, it is presented that there is a two-way causality for enterprise credit and economic growth in the short and long-run. The lending structure determines how much financial development impacts economic growth. Our findings explain that it is not relevant how much money financial institutions lend, but to whom and for what purposes it is lent is quite significant in Turkiye.

Anahtar Kelimeler

The Effect of Household versus Enterprise Credit on Economic Growth in Turkiye

Abstract

Although theoretical predictions suggest distinct impacts of household and enterprise credit on the economy, the empirical literature has predominantly relied on aggregate indicators of total bank lending to the private sector. This study aims to empirically assess the effects of total bank credit on the private sector as well as enterprise (or business) and household credit markets on economic growth. The empirical study is based on a time series approach called ARDL cointegration to reveal the long and short-run relationships between related variables. An annual time series data from 1986 to 2021 is applied for Turkiye. Empirical results show that enterprise credit has a positive impact on economic growth, whereas household credit does not affect economic growth. The findings also show that the total amount of banking credit given to the private sector does not affect economic growth. Furthermore, it is presented that there is a two-way causality for enterprise credit and economic growth in the short and long-run. The lending structure determines how much financial development impacts economic growth. Our findings explain that it is not relevant how much money financial institutions lend, but to whom and for what purposes it is lent is quite significant in Turkiye.

Keywords

Kaynakça

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Ayrıntılar

Birincil Dil

İngilizce

Konular

Finans

Bölüm

Araştırma Makalesi

Yazarlar

Betül İsmiç
0009-0009-9945-6393
Türkiye

Sedef Şen ^*
0000-0003-4426-8861
Türkiye

Erken Görünüm Tarihi

25 Ekim 2023

Yayımlanma Tarihi

30 Ekim 2023

Gönderilme Tarihi

22 Temmuz 2023

Kabul Tarihi

29 Eylül 2023

Yayımlandığı Sayı

Yıl 2023 Cilt: 24 Sayı: 4

DOI

https://doi.org/10.37880/cumuiibf.1331347

IZ

https://izlik.org/JA73TL95CL

Kaynak Göster

RIS / Bibtex

APA

İsmiç, B., & Şen, S. (2023). The Effect of Household versus Enterprise Credit on Economic Growth in Turkiye. Cumhuriyet Üniversitesi İktisadi ve İdari Bilimler Dergisi, 24(4), 659-670. https://doi.org/10.37880/cumuiibf.1331347

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Bingöl Üniversitesi Sosyal Bilimler Enstitüsü Dergisi

https://doi.org/10.29029/busbed.1482233