Financial development and firm growth in Turkish manufacturing industry: evidence from heterogeneous panel based non-causality test

Figures & data

Table 1. Listed firms sorted by subsector.

		Subsector
		S1	S2	S3	S4	S5	S6	S7
	Food, beverage and tobacco		Textile, wearing apparel and leather	Paper and paper products, printing and publishing	Chemicals, petroleum rubber and plastics products	Non-metallic mineral products	Basic metal industries	Fabricated metal products, machinery and equipment
Listed firm
	BANVT		ALTIN	DGZTE	AKSA	ADANA	BRSAN	ALCAR
	DARDL		BOSSA	DURDO	AYGAZ	AFYON	BURCE	ARCLK
	FRIGO		DERIM	HURGZ	BAGFS	ANACM	CELHA	BFREN
	KENT		GEDIZ	KARTN	BRISA	ASLAN	CEMTS	BSHEV
	MERKO		KORDS	OLMKS	DEVA	BOLUC	COMDO	DITAS
	PINSU		KRTEK	tyre	DYOBY	BTCIM	ERBOS	EGEEN
	PNSUT		LUKSK	VKING	ECILC	BUCIM	EREGL	FMIZP
	TATKS		SKTAS		EGGUB	CIMSA	FENIS	FROTO
	TBORG		SNPAM		EGPRO	CMENT	IZMDC	MAKTK
	TUKAS		YUNSA		EPLAS	DENCM	SARKY	MUTLU
					GOODY	DOGUB		OTKAR
					GUBRF	ECYAP		PARSN
					HEKTS	EGSER		PRKAB
					MRSHL	GOLTS		TOASO
					PETKM	IZOCM		TUDDF
					PIMAS	KONYA		VESTL
					PTOFS	KUTPO
					TRCAS	MRDIN
					TUPRS	TRKCM
						UNYEC
						USAK
Total	10		10	7	19	21	10	16

Source: Public Disclosure Platform, www.kap.org.tr/en/bist-sirketler.

Table 2. Weightings obtained from PCA for banking and stock markets for Turkey.

Banking sector variable	Weighting	Stock market variable	Weighting
Liquid liabilities/GDP	0.155561	Stock market capitalization/GDP	0.195068
Central bank assets/GDP	0.160639	Stock market total value traded/GDP	0.193057
Deposit money bank assets/GDP	0.158025	Stock market turnover ratio	0.166819
Private credit by deposit money banks/GDP	0.121115	Number of listed companies per 10,000 population	0.162816
Bank deposits/GDP	0.158250	Private bond market capitalisation/GDP	0.116947
Financial system deposits/GDP	0.158025	Public bond market capitalisation/GDP	0.165294
Bank cost–income ratio	0.088384

Source: Author estimation results.

Notes: PCA outputs are not reported. These are available upon request.

Table 3. LLC and IPS unit root results.

	Test	LLC				IPS
	Variable	nsg	roa	Bank	Stock	nsg	roa	Bank	Stock
Unit	Model	Stat	Stat	Stat	Stat	Stat	Stat	Stat	Stat
1	c	−4.566^***	−4.919^***	6.213	−8.435^***	−3.266^***	−4.142^***	5.741	−4.223^***
	c + t	−8.192^***	−4.144^***	−9.094^***	−3.337^***	−7.988^***	−5.181^***	−6.313^***	2.010
2	c	−5.780^***	−6.075^***	6.213	−8.435^***	−3.964^***	−5.909^***	5.741	−4.223^***
	c + t	−6.470^***	−3.796^***	−9.094^***	−3.337^***	−7.314^***	−4.626^***	−6.313^***	2.010
3	c	−2.050^**	−3.086^***	6.213	−8.435^***	−1.019	−3.665^***	5.741	−4.223^***
	c+t	−5.639^***	−3.101^***	−9.094^***	−3.337^***	−5.429^***	−3.358^***	−6.313^***	2.010
4	c	−5.163^***	−6.590^***	6.213	−8.435^***	−3.424^***	−6.794^***	5.741	−4.223^***
	c + t	−11.341^***	−6.618^***	−9.094^***	−3.337^***	−10.268^***	−6.513^***	−6.313^***	2.010
5	c	−3.770^***	−6.406^***	6.213	−8.435^***	−1.110	−5.742^***	5.741	−4.223^***
	c + t	−11.229^***	−6.135^***	−9.094^***	−3.337^***	−8.441^***	−6.732^***	−6.313^***	2.010
6	c	−5.733^***	−2.463^***	6.213	−8.435^***	−3.494^***	−3.576^***	5.741	−4.223^***
	c+t	−9.155^***	−1.571^*	−9.094^***	−3.337^***	−8.904^***	−3.225^***	−6.313^***	2.010
7	c	−3.088^***	−5.036^***	6.213^***	−8.435^***	−2.249^**	−4.883^***	5.741	−4.223^***
	c + t	−10.561^***	−5.758^***	−9.094^***	−3.337^***	−9.544^***	−5.200^***	−6.313^***	2.010

Source: Author estimation results.

Notes: c signifies models with intercepts while c + t signifies models including both intercept and trend.

***, ** and * indicate statistical significance at 1%, 5% and 10%, respectively.

Table 4. Pesaran’s CD test results.

Unit	nsg = f(bank)	nsg = f(stock)	roa = f(bank)	roa = f(stock)
1	14.937^***	15.477^***	5.168^***	5.509^***
2	18.880^***	18.051^***	6.731^***	5.845^***
3	9.644^***	9.899^***	3.304^***	3.745^***
4	20.325^***	18.071^***	10.174^***	9.870^***
5	30.098	31.368^***	11.183^***	10.490^***
6	16.528^***	16.417^***	3.874^***	3.018^***
7	16.575^***	19.502^***	1.681^*	2.309^**

Source: Author estimation results.

***, ** and * indicate statistical significance at 1%, 5% and 10%, respectively.

Table 5. Panel causality results.

Null hypothesis Unit	H0: nsg does not cause bank	H0: bank does not cause nsg	H0: nsg does not cause stock	H0: stock does not cause nsg	H0: roa does not cause bank	H0: bank does not cause roa	H0: roa does not cause stock	H0: stock does not cause roa
1	2.740^***	5.036^***	0.816	4.324^***	3.089^***	1.822	0.721	2.364^**
2	1.984	7.834^***	0.536	4.585^***	1.082	2.411^**	1.273	2.681^***
3	3.462^***	5.928^***	0.695	6.109^***	0.560	1.205	1.758	1.518
4	4.351^***	5.374^***	1.088	5.466^***	0.957	1.949^**	0.735	1.916^*
5	4.245^***	5.678^***	0.777	5.628^***	0.820	2.060^**	1.742	1.814^*
6	6.036^***	5.774^***	1.281	4.828^***	1.645	2.249^**	2.875^***	2.046^*
7	3.157^***	2.900^***	0.797	5.093^***	0.643	2.385^***	1.529	3.340^***

Source: Author estimation results.

***, ** and * indicate statistical significance at 1%, 5% and 10%, respectively.

Table 6. Subsector-specific relationships.

Subsector	Relationship
1	Bank ⇔ nsg	Stock ⇒ nsg	Bank ⇐ roa	Stock ⇒ roa
2	Bank ⇒ nsg	Stock ⇒ nsg	Bank ⇒ roa	Stock ⇒ roa
3	Bank ⇔ nsg	Stock ⇒ nsg	∅	∅
4	Bank ⇔ nsg	Stock ⇒ nsg	Bank ⇒ roa	Stock ⇒ roa
5	Bank ⇔ nsg	Stock ⇒ nsg	Bank ⇒ roa	Stock ⇒ roa
6	Bank ⇔ nsg	Stock ⇒ nsg	Bank ⇒ roa	Stock ⇔ roa
7	Bank ⇔ nsg	Stock ⇒ nsg	Bank ⇒ roa	Stock ⇒ roa

Source: Author estimation results.