A performance-based assessment of Turkish private pension funds: Efficiency, scale economies, and competitiveness

Abstract

This study evaluates the performance of private pension providers via three dimensions-efficiency, economies of scale, and competitive structure-of the private pension sector in Türkiye using a multi-method approach. The study employs a three-stage approach: data envelopment analysis to measure technical efficiency, Tobit regression to identify determinants, and the Panzar–Rosse model and Herfindahl-Hirschman Index to assess market structure. The analysis utilises firm-level panel data from 21 pension companies over 2013–2022. The empirical findings reveal that larger firm size is associated with improved efficiency, although diminishing returns emerge at higher asset scales. Financial profitability enhances technical efficiency, whereas a higher equity ratio and investment in both interestbearing and interest-free financial instruments reduce it. The results indicate limited competition in a monopolistic or collusive market structure, which, paradoxically, is linked to improved technical efficiency by allowing managers to better exploit strategic advantages.