Resumen
The core objective of the current study is to analyze the relationship between the interest rate changes on the profitability of the participation banks being operated in Turkey by examining the financial statements of three major participation banks during 2008 Q1 to 2016 Q3. The panel data analysis and panel cointegration estimation technique are adopted to achieve the objectives of the study. The results from Kao co-integration test show that the variables are cointegrated. In addition, the coefficient of interest rate on profitability estimated by FMOLS. The empirical analysis shows that the interest rate changes have a significantly positive relationship with the profitability of the participation banks.