Foreign Banks in Turkey and Other EU Accession Countries - Does Minority Vs. Majority Ownership Make the Difference?

Abstract

We compare banking sector development in the EU Accession Countries (AC) Bulgaria, Croatia, Romania and Turkey with a special emphasis on the role of foreign banks. We discuss selected features of the Accession Countries’ banking sector reform and patterns of foreign entry, combining the efficient structure hypothesis with findings from the joint venture literature. As in the early stages of economic restructuring in other AC, Turkey currently relies on minority foreign bank involvement and industry-bank conglomerates. We argue that minority foreign bank involvement did not prove conducive to economic growth in the New EU Member States and other EU Accession Countries.