Abstract:

Purpose: The purpose of the study is to provide an econometric analysis of the relationship among Turkey’s economic growth, stock market and banking. Design/Methodology: In the model, economic growth’s relationships with both total stock market capitalization and total bank commercial credits are examined. Following a co-integration test and a vector error correction model (VECM), the direction of causality is identified via Granger causality test. Findings: The findings include results of which some are in line with predictions while some are not. A statistically significant causality relationship is identified from total bank commercial credits towards economic growth. However, there is not a statistically significant causality relationship from stock market total capitalization towards economic growth. Limitations: The use of a two-variable data set that is on Turkey only constitutes the limitation of the study. Originality/Value: The investigation of the comperative roles of the banking and stock market that they played in shaping Turkey’s economic growth after the global crisis of 2008 constitutes the original value of the research. Moreover, it is considered that the findings are in the quality of proving the economic management and policymakers with useful insights.

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