Turkish Bank Subsidiaries’ Lending Behavior During Electoral Cycles

Bank lending could be influenced by political considerations. Using bank-level financial statements data from the Banks Association of Türkiye (BAT) for the 2008-2022 period, this thesis analyzes the impact of electoral cycles and ownership structures on subsidiary-level bank lending patterns. Further, it examines the roles played by cultural and political proximity between the destination and the origin country, as well as country characteristics and business model of the subsidiaries. The findings of this study show that state-owned subsidiaries reduce their lending during Turkish election periods. Nevertheless, the magnitude of the result decreases considering controls for several heterogeneous effects. Robustness checks across different subsamples validate our findings. The results highlight that foreign bank subsidiaries’ lending patterns notably differ depending on the ownership structure.