The Real Effects of Bank Restructuring in the Wake of Crisis: Evidence from Turkey

Fatih Cemil ÖZBUĞDAY, Önder ÖZGÜR


Following the two severe crises in the beginnings of 2000s, Turkey had to implement a radical set of reforms in her banking sector. This study is the first attempt to empirically investigate the spillover effects of these reforms on the real economy. Using industry-level data for the period 1998-2003, the study employs a difference-in-differences approach. The set of findings indicate that the restructuring reforms had positive spillovers for bank-dependent large firms, small firms were not able to shield themselves from the stricter measures over banks restricted bank-dependent firms to access external funds. All these findings have important implications for policymakers.

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