Title: Econometric investigation of the relationship of return on assets with the capital adequacy and leverage ratios in banking system of Turkey

Authors: Furkan Yildirim

Addresses: Faculty of Applied Sciences, Akdeniz University, Antalya, Turkey

Abstract: In this study, the relationship of the return on assets in the banking system with capital adequacy ratio and leverage ratio in Turkey was investigated. The goal of the econometric analysis of the short- and long-term relationship between 2001-2018 was aimed. Econometric analysis of the short and the long-term relationship between 2001-2018 was performed. In the study, ADF and PP tests were used for the unit root test of the series. By using the Johansen-Juselius test as a cointegration test, the long-term relationship between variables was investigated. The vector error correction model was used to determine the short-term effect. As a result of the study, it was observed that capital adequacy and leverage ratios had an effect on the return on assets of the Turkish banking sector.

Keywords: return on assets; ROAs; capital adequacy ratio; leverage ratio; banking sector; Turkey.

DOI: 10.1504/IJPSPM.2024.138042

International Journal of Public Sector Performance Management, 2024 Vol.13 No.3, pp.388 - 397

Received: 27 Feb 2020
Accepted: 21 Sep 2020
Published online: 18 Apr 2024 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article