Abstract:

Geographic concentration in banking loans means that loans are used in some locals or region, in other words loans concentrate on some regions. Banks’, systemically important, main operations is financial intermediary and so credit operations, these operations are affected and affect macro economy. While “concentration” reflects a portfolio preference, scale and geography is related with production. Therefore, every kind of concentration in banking sector, not only affect banks’ risk and return and also affect financial stability and macro economy and so, “the role of credit in macro economy” is worth to study. Therefore, in this study, it is considered the relationship between geographic concentration in Turkish banking sector loans and growt with the annually data between 1988-2020. It is not seen any study in literature such a kind of study. Because of many crises in Turkey economy in this period, it is added a dummy variable to the model for it. It is preferred Autoregressive Distributed Lag Bound Test (ARDL) as method, because the stationary levels of variables are different according to ADF and NG Perron unit root test results. As geographic concentration indicator, it is used Herfindahl-Hirschman Index. According to analysis results of the model passed the all diagnostic tests, there are negative relationship between growth and geographic concentration, but is not statistical meaningful.

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