Financial liberalization in Turkey and the evolution of ownership structures

This thesis describes how ownership structures of Turkish listed companies changed from 1986 to 2020. The financial liberalization program, implemented in the 1980s, aimed to increase financial literacy and expand the investor base. The opening of the stock exchange, Istanbul Stock Exchange, (ISE) in 1986 was a part of the financial liberalization program. The opening of a modern stock market aimed to widen the investor base and spread firm control across society. I examine the 40 companies first listed on Istanbul Stock Exchange in 1986. One company is dropped from the sample due to missing data for 1986. Six of the remaining 39 companies had ceased operations by 2020. Thirty-three companies are still in operation in 2020 with 6 of them going private in the interim. Two of the six private companies did not have publicly available ownership data. The largest shareholder, on average, controlled 34 percent, the three largest shareholders 61 percent, and the five largest controlled 65 percent of shares in 1986 in the 31 sample companies. The largest shareholder controlled 59 percent, the three largest shareholders 74 percent, and the five largest controlled 76 percent of shares in 2020. I found that ownership concentration, the measure of how control is concentrated across the largest shareholders, increased in Turkish firms from their first listing in 1986 to 2020. Contrary to the aims of the financial liberalization program, the results suggest, ownership became more concentrated in the hands of the largest shareholders.