PERSISTENCE OF PROFITABILITY IN TURKEY: EVIDENCE FROM INSURANCE SECTOR
PERSISTENCE OF PROFITABILITY IN TURKEY: EVIDENCE FROM INSURANCE SECTOR

Summary/Abstract: In recent years, the investigation of persistency of profit for insurance sector has become a significant subject of research with its increasing importance in economy. With this respect, by using the data of return on assets (ROA) and return on equity (ROE) of 7 insurance companies quoted in BIST (Stock Market of Istanbul) in the period from March 2005 till September 2013, the profit of these companies was investigated whether persistent or not via IPS (2003) without break and Panel LM (2005) with structural break unit root tests. As a result of study, by eliminating the findings via panel LM test that profit was observed persistent from model without break, profit was determined non-persistent in situation taken into account structural breaks. The reason of this situation can be competitive economic structure and effects of 2008 global financial crisis in the scope of being developing country of Turkey. Furthermore, these findings are supported by accomplished previous literature for Turkey.

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