Özet:

The aim of the study is to analyze the asset size of participation banking in Turkiye through selected variables. For this purpose, the quarterly data set for the period 2010–2020 was analyzed with ARDL Cointegration and Toda Yamamoto Causality tests. According to the results of the ARDL Test, a cointegration relationship is found between bank asset size and ratios on balance sheet and macroeconomic variables. According to the long-run estimation results of the ARDL Test, the increase in gross domestic product (GDP) and consumer price index (CPI) positively affected asset size. At the balance sheet level, increases in leverage, capital adequacy, and non-performing loan ratios had a positive effect on asset size, while increases in the operating ratio had a negative effect. In the short run, the effects of the level and lagged values of independent variables on asset size differed. According to the Toda Yamamoto causality test estimation results, a bidirectional causality relationship is found between the independent variables CPI and balance sheet level and asset size. The existence of a cyclical relationship between leverage ratio and asset size indicates that financial cycles may accelerate in the long run. Through new investments that will be provided by the acceleration of financial cycles, it is possible to increase the number of traditional and digital participation banks and the balance sheet size of existing banks. Participation banks should follow current developments in payment systems and adapt to these developments rapidly. The sustainability of the growth of participation banking should be supported by continuing to increase the number of Islamic financial products supported by technology and reaching more potential customers in this context.

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