The COVID-19 Pandemic’s Impact on the Performance of Firms on the BIST 100 Index

Year 2024, , 119 - 136, 30.04.2024

Meltem Altın , Mustafa Özgün Atalay

https://doi.org/10.26650/ibr.2024.53.1138732

Abstract

The coronavirus (COVID-19) pandemic that affected the world has caused a decline in most companies’ financial performance. This study aims to analyze the effects of the COVID-19 pandemic on the financial performance of companies traded in Türkiye’s Borsa Istanbul 100 (BIST 100) index for 2019-2021. Pooled ordinary least squares (OLS) regression was applied as the basic method to determine the effects of the COVID-19 pandemic on the financial performance of companies listed on the BIST 100 index. The study’s findings show the COVID-19 pandemic to have had effects on the profitability of companies listed on the BIST 100 index. The results reveal net working capital, size (total assets), and financial autonomy ratios to be the ratios that affect return on assets (ROA), with the return on equity ratio (ROE) being affected only by size. These results show the BIST 100 index to have adapted to a certain extent to the uncertainties caused by the pandemic, so the shock has not been devastating. This study provides valuable insights that can assist investors, managers, creditors, and other stakeholders in making informed decisions that lead to positive outcomes.

Keywords

COVID-19, firm performance, BIST 100, Türkiye

References

• Achim, M. V., Safta, I. L., Vâidean, V L., Mureşan, G. M., & Borlea, N. S. (2022). The impact of covid-19 on Financial management: evidence from Romania. Economic Research-Ekonomska Istrazivanja, 35(1), 1807-1832. https://doi.org/10.1080/1331677X.2021.1922090. google scholar
• Afrifa, G. A. (2016). Net working capital, cash flow and performance of UK SMEs. Review of Accounting and Finance, 15(1), 21-44. https://doi.org/10.1108/RAF-02-2015-0031. google scholar
• Al-Awadhi, A. M., Alsaifi, K., Al-Awadhi, A., & Alhammadi, S. (2020). Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns. Journal of behavioral and experimental finance, 27, 100326. https://doi.org/10.1016/j.jbef.2020.100326. google scholar
• Allıanz Araştırma (2020). Fırtına öncesi sessizlik: Covid-19 ve zaman bombası gibi bekleyen şirket iflasları. Retrieved from https://www.allianz-trade.com/tr_TR/ekonomik-arastirmalar/ekonomik-gorunum-rapor-lari/firtina-oncesi-sessizlik-covid-19-ve-zaman-bombasi-gibi-bekleyen-sirket-iflaslari.html google scholar
• Ali, M., Alam, N., and Rizvi, S. A. R. (2020). Coronavirus (COVID-19)-An epidemic or pandemic for fi-nancial markets, Journal of Behavioral and Experimental Finance, 27, 100341. https://doi.org/10.1016/j. jbef.2020.100341. google scholar
• Baker, S. R., Bloom, N., Davis, S. J., Kost, K., Sammon, M., & Viratyosin, T. (2020). The unprecedented stock market reaction to COVID-19. The review of asset pricing studies, 10(4), 742-758. https://doi. org/10.1093/rapstu/raaa008. google scholar
• Baskan, T. D., Akpınar, A., & Baran, E. (2022). COVID 19 Sürecinde İnşaat Sektöründeki İşletmelerin Fi-nansal Durum Analizi. Muhasebe Bilim Dünyası Dergisi, 24(COVID-19 Özel Sayısı), 128-149. https:// doi.org/10.31460/mbdd.1038773. google scholar
• Bayraktar, A. (2020). COVID 19 Pandemisinin Finansal Etkileri: BİST İmalat Sektörü Uygulaması. Electro-nic Turkish Studies, 15(8). 3415-3427. https://dx.doi.org/10.7827/TurkishStudies.46807. google scholar
• Cavlak, H. (2020). Covid-19 pandemisinin finansal raporlama üzerindeki olası etkileri: BİST 100 Endek-si’ndeki işletmelerin ara dönem finansal raporlarının incelenmesi. Gaziantep University Journal of 'Social Sciences, 19(COVID-19 Special Issue), 143-168. https://doi.org/10.21547/jss.755865. google scholar
• Chaudhuri, K., Kumbhakar, S. C., & Sundaram, L. (2016). Estimation of firm performance from a MI-MIC model. European Journal of Operational Research, 255(1), 298-307. https://doi.org/10.1016/j. ejor.2016.05.005. google scholar
• Demirhan, E. (2020). Covid-19 Küresel salgınının Türkiye CDS primlerine ve BİST 100 endeksine etkisi. Türkiye Ekonomi Politikaları Araştırma Vakfı. Retrieved from https://www.tepav.org.tr/upload/mce/2020/ tarisma_tebligleri/covid19_kuresel_salgininin_turkiye_cds_primlerine_ve_bist_100_endeksine_etkisi. pdf. google scholar
• Demirhan, D., & Sakin, A. Has COVID-19 Pandemic Affected Firm Profitability? Dynamic Panel Data Analysis of BIST Firms Using Dupont Identity Components. PressAcademia Procedia, 14(1), 42-47. https://doi.org/10.17261/Pressacademia.2021.1484. google scholar
• Euler Hermes (2020). Küresel iflas raporu. Retrieved from https://www.eulerhermes.com /content/dam/one-marketing/ehndbx/eulerhermes_com/tr_TR/documents/economik- yay%C4%B1nlar/euler_hermes_ku-resel_iflas_raporu.pdf google scholar
• Göker, İ. E. K., Eren, B. S., & Karaca, S. S. (2020). The impact of the COVID-19 (Coronavirus) on the Borsa Istanbul sector index returns: An event study. Gaziantep University Journal of Social Sciences, 19(CO-VID-19 Special Issue), 14-41. https://doi.org/10.21547/jss.731980. google scholar
• Gu, X., Ying, S., Zhang, W., ve Tao, Y. (2020). How Do Firms Respond to COVID-19? First Evidence from Suzhou, China. Emerging Markets, Finance and Trade, 56(10), 2181-2197. https://doi.org/10.1080/154 0496X.2020.1789455. google scholar
• Kabadayi, S., O’Connor, G. E., & Tuzovic, S. (2020). The impact of coronavirus on service ecosystems as service mega-disruptions. Journal of Services Marketing, 34(6), 809-817. https://doi.org/10.1108/JSM-03-2020-0090. google scholar
• Kılıç, Y. (2020). Borsa İstanbul’da COVID-19 (koronavirüs) etkisi. JOEEP: Journal of Emerging Economies and Policy, 5(1), 66-77. google scholar
• Kizil, C., & Aslan, T. (2019). Finansal performansın Rasyo Yöntemiyle Analizi: Borsa İstanbul’da (Bist’de) İşlem gören havayolu şirketleri üzerine bir uygulama. Manas Sosyal Araştırmalar Dergisi, 8(2), 17781799. https://doi.org/10.33206/mjss.467997. google scholar
• KPMG. (2020). İş dünyası gözünden Covid-19’un etkileri anketi. KPMG Türkiye Strateji ve Operasyonlar Danışmanlığı Çalışmaları. Retrieved from https://home.kpmg/tr/tr/home/gorusler/2020/04/is-dunyasi-gozunden-covid19un-etkileri-anketi.html google scholar
• Laing, T. (2020). The economic impact of the Coronavirus 2019 (Covid-2019): Implications for the mining industry. The extractive industries and society, 7(2), 580-582. https://doi.org/10.1016/j.exis.2020.04.003. google scholar
• Mazur, M., Dang, M., & Vega, M. (2021). COVID-19 and the march 2020 stock market crash. Evidence from S&P1500. Finance Research Letters, 38, 101690. https://doi.org/10.1016/j.frl.2020.101690. google scholar
• Nasrallah, N., & El Khoury, R. (2022). Is corporate governance a good predictor of SMEs financial perfor-mance? Evidence from developing countries (the case of Lebanon). Journal of Sustainable Finance & Investment, 12(1), 13-43. https://doi.org/10.1080/20430795.2021.1874213. google scholar
• Njindan Iyke, B. (2020). The disease outbreak channel of exchange rate return predictability: Evidence from COVID-19. Emerging Markets Finance and Trade, 56(10), 2277-2297. https://doi.org/10.1080/154049 6X.2020.1784718. google scholar
• Nizam, E., Ng, A., Dewandaru, G., Nagayev, R., & Nkoba, M. A. (2019). The impact of social and environ-mental sustainability on financial performance: A global analysis of the banking sector. Journal of Multi-national Financial Management, 49, 35-53. https://doi.org/10.1016/j.mulfin.2019.01.002. google scholar
• Öztürk, Ö., Şişman, M. Y, Uslu, H., & Çıtak, F. (2020). Effect of COVID-19 outbreak on Turkish stock market: a sectoral-level analysis. Hitit University Journal of Social Sciences Institute, 13(1), 56-68. google scholar
• Papadamou, S. Ve Fassas, A. And Kenourgios, D.ve Dimitriou, D. (2020). Direct and Indirect Effects of COVID-19 Pandemic on Implied Stock Market Volatility: Evidence from Panel Data Analysis. MPRA Paper, 100020. google scholar
• Peker, Y, & Demirhan, E. (2020). Covid-19 küresel salgınının borsa İstanbul’daki sektörel etkileri. Türkiye Ekonomi Politikaları Araştırma Vakfı (TEPAV). Retrieved from https://www.tepav.org.tr/upload/ mce/2020/notlar/covid19_kuresel_salgininin_borsa_istanbuldaki_sektorel_etkileri.pdf google scholar
• Ramzan, M., Amin, M., & Abbas, M. (2021). How does corporate social responsibility affect financial per-formance, financial stability, and financial inclusion in the banking sector? Evidence from Pakistan. Re-search in International Business and Finance, 55, 101314. https://doi.org/10.1016/j.ribaf.2020.101314. google scholar
• Salisu, A. A., Sikiru, A. A., and Vo, X. V. (2020). Pandemics and the emerging stock markets, Borsa Istanbul Review, 20(1), 40-48. https://doi.org/10.1016/j.bir.2020.11.004. google scholar
• Topcu, M., & Gulal, O. S. (2020). The impact of COVID-19 on emerging stock markets. Finance Research Letters, 36, 101691. https://doi.org/10.1016/j.frl.2020.101691. google scholar
• UNCTAD (2020). The Covid-19 shock to developing countries: towards a “whatever it takes” programme for the two-thirds of the world’s population being left behind. Retrieved from https://unctad.org/en/ google scholar
• Vatavu, S. (2015). The impact of capital structure on financial performance in Romanian listed companies. Procedia Economics and Finance, 32, 1314-1322. https://doi.org/10.1016/S2212-5671(15)01508-7. google scholar
• Xiong, J., Lipsitz, O., Nasri, F., Lui, L. M., Gill, H., Phan, L., ... & McIntyre, R. S. (2020). Impact of CO-VID-19 pandemic on mental health in the general population: A systematic review. Journal of affective disorders, 277, 55-64. https://doi.org/10.1016/j.jad.2020.08.001. google scholar
• Zhang, D., Hu, M., and Ji, Q. (2020). Financial markets under the global pandemic of COVID- 19. Finance Research Letters, 36, 101528. https://doi.org/10.1016/j.frl.2020.101528. google scholar