If bank capital matters, then how? The effect of bank capital on profitability of Turkish banks during the recent financial crisis

Abstract

The goal of this study is to examine if higher bank capital resulted in higher profitability of Turkish banks before and during the recent (2008–2009) financial crisis. Using the ordinary least squares, fixed effects and generalized method of moment estimator techniques, we find that higher bank capital had positive effects on bank profitability at all times, and the effect was more pronounced during the financial crisis.