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ISE REVIEW

The Effect of Scale and Mode of Ownwership on the Turkish Banking Sector Financial Performance
Muhammet Mercan & Reha Yolalan

Abstract

In this study, a financial performance index is calculated for the 1989-1998 period in order to analyze the profit generating capability of Turkish commercial banks, observe the effect of scale and mode of ownership on bank behavior and therefore bank performance. Another purpose of the study is to compare the financial performance of the time period over time. In order to construct a composite performance index, five fundamental financial ratios are selected. Assuming that these ratios are indicative of the financial performance of a bank, the Data Envelopment Analysis (DEA) which is a linear programming based technique for measuring the relative performance of organizational units is used. Since DEA method assesses the relative performance, DEA based performance index is calculated from a pool of ten years data to be able to do a meaningful comparison between years. After the DEA scores are obtained, yearly averages for all banks in the sample, yearly averages according to their mode of ownership and according to scale are calculated. Then, the average scores are compared for the considered time period.

The Role of Venture Capitalists as Financial Intermediaries in Capital Markets
Halil İ. Bulut

Abstract

This study focuses on the role of venture capitalists in the creation of public companies. The two issues have encouraged this study: First, the success of venture capitalists in the creation of public companies has recently attracted considerable attention in the US. Second, recently Turkey has been trying to develop not only capital markets but also venture capital industry. This study is a summary of the works focused on whether the capital markets recognize the certification role of venture capitalists in initial public offerings. In those works it was aimed to explain that how the capital markets recognize the certification role of venture capitalists by comparing the venture capital-backed initial public offerings with a control sample of non-venture capital-backed initial public offerings regarding relevant features of venture capital industry.

 An Inquiry on the Factors Contributing to the Economic Crises in Turkey
Kamuran Malatyalı

Abstract

The aim of this paper is to perform a crises analysis for Turkey based on the ISE index values. To this aim, a probit analysis is adopted. For yields lower than a threshold a “negative crisis” situation is stipulated while for yields higher than a threshold in the positive yield distribution area a “positive crisis”  is defined considering bubbles in the securities market, as well, increasing the possibility of an economy-wide crisis as experienced in the latest Asian Crisis. Hence, two different sets of estimation results related to the two different crises conditions are obtained. The results of the two models show that capital flows and international choice of investment are the factors adding to the possibility of crisis condition in Turkey. In addition, inflation and real sector activities affect the possibility of crisis condition. Lastly, the level of interbank rates, a policy tool of the Central Bank, affect the possibility of a crisis condition in Turkey. 

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