The Relationship between Total Factor Productivity and Shareholder Returns in Turkish Banking Sector

Article Information
Journal: Business and Economics Research Journal
Title of Article: The Relationship between Total Factor Productivity and Shareholder Returns in Turkish Banking Sector
Author(s): Serhat Duranay, Gamze Gocmen Yagcilar
Volume: 10
Number: 1
Year: 2019
Page: 27-40
ISSN: 2619-9491
DOI Number: 10.20409/berj.2019.154
The study, which was conducted in Turkish Banks between 2002-206, has three main objectives: (i) to examine the Total Factor Productivity (TFP) of deposit banks operating in Turkey, (ii) to compare the productivity changes of banks that listed and non-listed listed on the stock exchange, and (iii) to evaluate the relationship between the change in productivity and shareholder returns of the listed banks. In this way, the hypothesis that “the shareholder returns of banks with increased productivity also increase” will be tested. In line with the stated objectives, the productivity change of 22 banks between examined period was measured by using the Malmquist TFP index. There was no significant difference between the productivity changes of the listed and non – listed banks. Then, for the period 2007-2016, the shareholder returns and productivity changes of 10 banks listed in the stock exchange were calculated. While there was no significant relationship between total factor productivity and shareholder returns, it was observed that the change in technical efficiency had a positive and significant effect on it. However, regression analyzes were repeated using control variables (market return, book value/market value, return on assets) to test this relationship. After repeated regression analysis, it was concluded that the relationship is disappeared.

Keywords: Deposit Banks, Malmquist TFP, Shareholder Return, Efficiency, Productivity

JEL Classification: G21, G30, D24 Full Text