GEOPOLITICAL RISK AND BANK PERFORMANCE IN TURKIYE: EVIDENCE FROM TWO-STEP SYSTEM GMM AND PANEL THRESHOLD MODELS

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Bulut A. E.

EKONOMSKA MISAO I PRAKSA, cilt.35, sa.2, ss.1-25, 2026 (ESCI, Scopus)

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 35 Sayı: 2
  • Basım Tarihi: 2026
  • Doi Numarası: 10.17818/emip/2026/20
  • Dergi Adı: EKONOMSKA MISAO I PRAKSA
  • Derginin Tarandığı İndeksler: Scopus, Emerging Sources Citation Index (ESCI), ABI/INFORM, EconLit, Directory of Open Access Journals
  • Sayfa Sayıları: ss.1-25
  • Açık Arşiv Koleksiyonu: AVESİS Açık Erişim Koleksiyonu
  • Dokuz Eylül Üniversitesi Adresli: Evet

Özet

This paper analyses how geopolitical risk (GPR) influences bank profitability (ROA) and credit risk (NPL) across 25 deposit banks in Türkiye, focusing on the role of bank size (SIZE) during 2006–2024. Using Two-Step System GMM and panel threshold methods, the findings indicate that a 1% increase in GPR reduces ROA by 0.32% and increases NPL by 0.12%. Larger banks are better able to absorb these effects. The negative impact of GPR is more pronounced for smaller banks (SIZE ≤ 7.63) regarding profitability and results in a sharper rise in NPL (SIZE ≤ 8.24). As bank size exceeds these thresholds, the adverse effects become less significant, reflecting scale advantages and stronger risk management. Ownership is also important: private and foreign banks generally perform better, while state-owned banks demonstrate greater resilience to geopolitical shocks.