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dc.contributor.authorDemir, N.en_US
dc.contributor.authorMahmud, S. F.en_US
dc.contributor.authorBabuscu, S.en_US
dc.date.accessioned2016-02-08T09:57:33Z
dc.date.available2016-02-08T09:57:33Z
dc.date.issued2010en_US
dc.identifier.issn1450-2887en_US
dc.identifier.urihttp://hdl.handle.net/11693/22251en_US
dc.description.abstractTurkey embraced its worst banking crisis in the year 2001 after a long history of high inflation. Only one-third of the private domestic banks could survive immediately before and then after the crisis, mainly because of cost inefficiencies. We argue that many bank managers were trapped into cost inefficiencies during the high inflation years because they over-expanded with many new branches, looking for additional costly scarce funds in order to invest in government's securities for exuberant profits. Based on a stochastic total cost frontier with inefficiency effects (CIE) model, bank samples provide strong evidence that investing more in government securities during high inflation periods is highly significant in explaning cost inefficiency differentials among banks, in contrast to low inflation periods. A policy implication is that when inflation subsides rapidly, banks which invest heavily in government securities under high inflation are confronted with financial deterioration since they cannot adjust their cost structure, e.g., by closing several of their branches, in line with revenue losses. © EuroJournals Publishing, Inc. 2010.en_US
dc.language.isoEnglishen_US
dc.source.titleInternational Research Journal of Finance and Economicsen_US
dc.subjectCost inefficiencyen_US
dc.subjectInflationen_US
dc.subjectTurkish depository banksen_US
dc.titleDepository banks were trapped high inflation into cost inefficiency: The Turkish experienceen_US
dc.typeArticleen_US
dc.departmentDepartment of Banking and Financeen_US
dc.citation.spage105en_US
dc.citation.epage111en_US
dc.citation.volumeNumber44en_US


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