Market Structure And Efficiency As Determinants Of Profitability In The Turkish Banking Industry
This paper investigates market structure and efficiency as determinants of profitability in Turkish banking. The aim of this paper is to establish which of these possible determinants of profitability performance is dominant in Turkish banking. There are two main competing theories that support such relationship. The market power theory (the traditional structure-conduct-performance (SCP) and relative market power theories) and the efficiency theory. In this paper, these theories are tested and distinguished for the Turkish banking industry for the years 1989-1995 inclusive. The results support the efficiency theory with there being no statistically significant evidence to support the market power theory for the period studied.