Navigating export finance in Turkiye: Key drivers of bank selection

Abstract

In an increasingly competitive global trade environment, selecting the right banking partner is crucial for exporters. The primary objective of this study is to identify the key factors affecting the bank selection decisions of exporters in Turkiye. The study evaluates participants' opinions on 32 variables using a five-point Likert scale questionnaire. Statistical analyses were performed using the data collected from a sample composed of the representatives of 130 exporting SMEs. Exploratory factor analysis using the principal component method is utilized to discern underlying dimensions. The exploratory factor analysis ended up with five dimensions identifying firms' decisions on bank selection. These dimensions are labelled as comprehensive export support and convenience in banking services, expertise in international trade and client engagement, religious alignment and ethical banking, customer loyalty and cost considerations, and peer influence and cultural integration. The study contributes to the literature in three ways. First, the study develops a new scale to assess bank selection from the viewpoint of exporting firms rather than retail customers. Second, the study addresses a research gap in institutional banking by illuminating the export sector through data from T & uuml;rkiye, an emerging market country that relies heavily on exports for economic growth. Finally, the study provides practical advantages for exporters and banking institutions. While the exporters can use the identified factors to make informed decisions in selecting banks, banks can customize their services to address exporters' specific requirements, thereby improving market competitiveness.