Understanding the Cyclical Nature of Financial Intermediation Costs

Intermediation costs (i.e., all noninterest bank expenses) are counter‐cyclical and their changes have significant effects at the country‐level; however, the literature is silent on what drives their cyclicality. Previous studies have examined costs using cross‐sectional or low frequency data and thus cannot capture dynamic macroeconomic effects across time. We fill this gap by examining U.S. intermediation costs using a quarterly, bank‐level dataset from 1993 through 2012. This data set allows for the separation of microeconomic and macroeconomic factors affecting the cyclicality of costs. The analysis shows that house prices are the main driving source of this counter‐cyclicality. Because housing is used as collateral, a price decline leads banks to increase their operating costs for monitoring, screening and litigation costs which cause a credit crunch in the economy.     

State Dependence in Poverty: The Case of Turkey

Despite poverty alleviation efforts, almost a quarter of households live below the poverty line in Turkey. This article aims to examine the dynamics of poverty focusing on poverty persistence in Turkey, utilizing Income and Living Conditions panel data belonging to 2010–2013. A random effects dynamic panel probit model has been employed. In order to tackle the initial values problem Heckman’s reduced form approximation is utilized. Empirical results indicate that gender, educational attainment, employment type, and household structure have statistically significant impact on the probability of being poor. Besides, experiencing poverty has a positive impact on future poverty likelihood, signalling state dependence.     

FOREIGN DIRECT INVESTMENT AND ENVIRONMENTAL REGULATIONS: A SURVEY

This paper presents a survey of the literature on the relationship between foreign direct investment (FDI) and environmental policy. First, I focus on empirical studies that analyse the impact of environmental costs on foreign investment locations. Next, I review the main studies that attempt to explain the lack of evidence for the pollution haven hypothesis. Then, I discuss the literature on the impact of FDI on local environmental regulations by concentrating on two recent political economy models. Finally, I conclude by summarizing the main findings of the literature and suggesting some future research directions.     

An integrative approach to relationship marketing,customer value,and customer outcomes in the retail banking industry: a customer-based perspective from Turkey

Given how important it is to provide superior value to customers and to maintain customer loyalty for a sustainable competitive advantage, the aim of this paper is to examine the relationships among relationship marketing components of – trust, competency, commitment, communication, and conflict handling, – relationship investment, relationship quality, perceived customer value, satisfaction and loyalty in an integrated framework in the Turkish retail banking industry. Unlike previous studies, this research extends the literature by analysing affective as well as cognitive dimensions in the same model with a holistic view by simultaneously examining the direct and indirect effects of the related concepts. The distinctive nature of this study is its evaluation of customer satisfaction and loyalty from the perspective of actual consumers. The research model was tested using data collected from 685 retail banking customers by applying structural equation modelling. The findings show that relationship marketing induces loyalty through relationship quality, customer value, and satisfaction, which are mainly provided by trust, communication, and relationship investment. Furthermore, relationship investment and relationship quality are the most important factors in the development of customer value, satisfaction, and loyalty. The emotional value dimension, which captures the affective aspects of perceived value, has the strongest effect on both satisfaction and loyalty.     

Effectiveness of the Financial Ratios in the Determination of the Fraudulent Financial Statements＂ Turkey Practice

Large-scale accounting scandals which were reflected to the world public opinion particularly in the 2000s （such as Enron, Lucent, Xerox, and Parmalat Bank for Reconstruction） carried the matter of fraudulent financial reporting which was made to deceive the financial statement users （Fraudulent Financial Report （FFR）） to the forefront in the agenda of the academicians, operators, and regulatory authorities. As in every crime action, the most effective measure to be taken in preventing FFR events is to try to prevent the FFR before arising. In order to achieve this, in the most effective manner, FFR events should be determined in the formation process. In this study, fraudulent financial statements are tried to be determined by using financial ratios. For this, financial statements of 22 companies which transact in the textile industry in Istanbul Stock Exchange （ISE） were examined. Twenty-three financial ratios were selected for the purpose of determining the risk of fraudulence in the financial statements of the selected companies. These ratios increased in value by multiple regression analysis. The findings which were obtained in the study indicated that some financial statements had the risk of fraudulence. It was concluded that the ratios of inventory/current asset, total debt ratio, and equity turnover rate were a good indicator in the determination of fraudulent financial statements.     

The Immoral Economy of Housing in Turkey

This paper presents an examination of the political, social and economic coordinates of informal housing in Turkey within an analytical framework in which the complex interaction between the organizing principles of reciprocity, redistribution and exchange is taken into account. The discussion is centered on two ideas: (1) both redistribution and reciprocity incorporate a moral principle which can be defined as ‘the unequal treatment of the unequal’ as opposed to the moral neutrality of market exchange which takes place between formally equal trading partners; and (2) in certain contexts where redistributive processes are not institutionalized in a rule-based, depersonalized manner but involve relations which take place within informal networks of reciprocity, the element of moral relativity that forms their basis might lead to situations where they lose their legitimacy and generate negative social consequences. The paper thus introduces a moral dimension into the discussion of informal sector activity by complementing Karl Polanyi's approach with Marshall Sahlins' typology of different types of reciprocity and shows that particular systems of redistribution might lead to the emergence of forms of negative reciprocity which shape both the market and the political process in a highly undesirable manner. Cet article présente un examen des coordonnées politiques, sociales et économiques du logement informel en Turquie, utilisant un modèle analytique dans lequel l'influence mutuelle entre les principes d'organisation, de réciprocité, de redistribution et d'échange, est prise en considération. La discussion porte sur deux idées: (1) la redistribution et la réciprocité comprennent toutes deux un principe moral qui peut être défini comme ‘le traitement inégal de l'inégal’, par opposition à la moralité neutre de l'échange de marché qui prend place entre des partenaires de commerce formellement égaux; et (2) dans certains contextes, lorsque les processus redistributifs ne sont pas institutionnalisés d'une façon formelle et impersonnelle mais incluent des relations qui prennent place dans des réseaux informels de reciprocité, l'élément de relativité morale qui forme leur base pourrait conduire à des situations où ils perdraient leur légitimité et auraient des conséquences sociales négatives. Cet article introduit donc une dimension morale à la discussion de l'activité du secteur informel en complémentant l'approche de Karl Polanyi avec la typologie des différents types de réciprocité de Marshall Sahlins, et montre que certains syst èmes de redistribution pourraient conduire à la naissance de formes de réciprocité négatives qui modèleraient de manière hautement indésirable et le processus du marché et le processus politique.