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THE IMPACT OF FINANCIAL LEVERAGE AND FIRM SIZE ON FINANCIAL PERFORMANCE: A RESEARCH ON COMPANIES TRADED IN BIST INDUSTRIALS INDEX

Year 2017, ICMEB17 Özel Sayısı, 796 - 811, 01.12.2017

Abstract

Financial performance which plays a crucial role in the ability of businesses to survive for many years is influenced by many factors. Whether financial leverage is high or large is showing better financial performance is one of the issues to be emphasized. The main purpose of this study is to investigate whether financial leverage and firm size have impact on the financial performance of businesses. To achieve this purpose, 136 businesses traded in the BIST Industrials Index were included in the analysis. Multiple regression analyzes were used to achieve these purposes and the impact of financial leverage and firm size factors on the financial performance of the businesses has been tested. As a result of the analyzes, financial leverage and firm size have impact on the financial performances of the businesses

References

  • Abbasi, A., & Malik, Q. A. (2015). Firms’ size moderating financial performance in growing firms: An empirical evidence from Pakistan. International Journal of Economics and Financial Issues, 5(2), 334-339.
  • Al-Shamaileh, M. O., & Khanfar, S. M. (2014). The effect of the financial leverage on the profitability in the tourism companies. Business and Economic Research, 4(2), 251-264.
  • Banafa, A. S. A. (2016). The effect of leverage, liquidity, and firm size on financial performance of listed non- financial firms in Kenya. Doctor of Philosophy, Jomo Kenyatta University of Agriculture and Technology, Kenya.
  • Beck,T., Demirgüç-Kunt, A., & Maksimovic, V. (2005). Financial and legal constraints to growth: Does firm size matter? The Journal of Finance, 60(1), 137-177.
  • Bui, N. T. H. (2017). The impact of financial leverage on firm performance: A case study of listed oil and gas companies in England. International Journal of Economics, Commerce and Management, 5(6), 477-485.
  • Camelia, B. (2013). Analysis model for return on capital employed. Annals of the “Constantin Brâncuşi”
  • University of Târgu Jiu, Economy Series, No: 1, 82-87. Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386-405.
  • Chaudhuri, S., Vasigh, B., & Chaudhuri, R. (2014). Estimation of fair rate of return on equity for Delhi international airport. Journal of Airport Management, 9(1), 76-91.
  • Dufera, A. (2010). Financial performance evaluation: A case study of Awash international bank. Mekelle University, Ethiopia.
  • Edesiri, G. O. (2014). Financial leverage behaviour and firm performance: Evidence from publicly quoted companies in Nigeria. Œconomica, 10(4), 99-106.
  • Evgeny, I. (2015). The impact of financial leverage on firm performance: Evıdence from Russia. Journal of
  • Corporate Finance Research, 9(2), 24-36. Hsia, C. C., & Fuller, B. R. (1996). an investigation into the firm size effect: a security market plane approach.
  • Journal of Accounting, Auditing & Finance, 11(1), 131-152. Iqbal, A., Mulani, J., & Kabiraj, S. (2013). Leverage, size of the firm and profitability: A case of Pakistani cement industry. International Journal of Business Insights & Transformation, 7(1), 16-22.
  • Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
  • Jiang, R. J., Tao, Q. T., & Santor, M. D. (2010). Research notes and commentaries: Alliance portfolio diversıty and firm performance. Strategic Management Journal, 31, 1136-1144.
  • Kartikasari, D., & Merianti, M. (2016). The effect of leverage and firm size to profitability of public manufacturing companies in Indonesia. International Journal of Economics and Financial Issues, 6(2), 409-413.
  • Kim, M. K. & Burnie, D. A. (2002). The firm size effect and the economic cycle. Journal of Financial Research, (1), 111-124.
  • Ku, Y. Y., & Yen, T. Y. (2016). Heterogeneous effect of financial leverage on corporate performance: A quantile regression analysis of Taiwanese companies. Review of Pacific Basin Financial Markets and Policies, (3), 1-33.
  • Li, M. Y. L., & Hwang, N. C. R. (2011). Effects of firm size, financial leverage and R&D expenditures on firm earnings: An analysis using quantile regression approach. A Journal of Accounting, Finance and Business Studies, 47(2), 182-204.
  • Marete, D. (2015). The relationship between firm size and financial leverage of firms listed at Nairobi securities exchange. The Degree of Master of Business Administration, School of Business, Universıty Of Nairobi, October, Kenya.
  • Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 48(3), 261-297.
  • Mule, R. K., Mukras, M. S., & Nzioka, O. M. (2015). Corporate size, profitability and market value: An econometric panel analysis of listed firms in Kenya. European Scientific Journal, 11(13), 376-396.
  • Mutluay, A. H., & Turaboğlu, T. T. (2013). Döviz kuru değişimlerinin firma performansına etkileri: Türkiye örneği. BDDK Bankacılık ve Finansal Piyasalar, 7(1), 59-78.
  • Nirajini, A., & Priya, K. B. (2017). Impact of Capital Structure on Financial Performance of the Listed Trading
  • Companies in Sri Lanka. International Journal of Scientific and Research Publications, 3(5), 1-9. Niresh, J. A., & Velnampy, T. (2014). Firm size and profitability: A study of listed manufacturing firms in Sri
  • Lanka. International Journal of Business and Management, 9(4), 57-64. Olawale, L. S., Ilo, B. M., & Lawal, F. K. (2017). The effect of firm size on performance of firms in Nigeria. The IEB International Journal of Finance, 15, 2-21.
  • Özcan, C., & Ayvaz, B. (2015). Çoklu regresyon yöntemi ile tedarik zinciri performansı ve uygulama derecesinin işletme karlılığı üzerindeki etkisinin incelenmesi. İstanbul Ticaret Üniversitesi Fen Bilimleri Dergisi, 25, 14.
  • Özhan, T. (2015). Borsa ve piyasalar anatomisi. İstanbul: e-Kitap Projesi.
  • Özhan, T. (2016). Borsaya teknik bakış: Açıklamalı terimler ve diyagramlarla, İstanbul: e-Kitap Projesi.
  • Pervan, M., & Višić, J. (2012). Influence of firm size on its business success. Croatian Operational Research Review, 3,213-223.
  • Ramin, A. K., Lizam, M., Zabri, S. M., & Ahmad, M. F. (2017). Firm’s size and solvency performance: Evidence from the Malaysian public listed firms. Journal of Engineering and Applied Sciences, 12(5), 1240-1244.
  • Singh, A. K., & Bansal, P. (2016). Impact of financial leverage on firm's performance and valuation: A panel data analysis. Indian Journal of Accounting, 48(2), 73-80.
  • Stratopoulos, T., & Dehning, B. (2000). Does successful investment in information technology solve the productivity paradox? Information & Management, 38(2), 103-117.
  • Vithessonthi, C., & Tongurai, J. (2015). The effect of leverage on performance: Domestically-oriented versus internationally-oriented firms. Research in International Business and Finance, 34, 265-280.
  • Uzgören, N. (2007). Uyum analizinin teorik esasları ve regresyon analizi ile benzerliğinin grafiksel boyutta karşılaştırılması. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, 18

FİNANSAL KALDIRAÇ VE FİRMA BÜYÜKLÜĞÜNÜN FİNANSAL PERFORMANS ÜZERİNE ETKİSİ: BIST SINAİ ENDEKSİNDE İŞLEM GÖREN İŞLETMELER ÜZERİNE BİR UYGULAMA

Year 2017, ICMEB17 Özel Sayısı, 796 - 811, 01.12.2017

Abstract

İşletmelerin uzun yıllar boyunca ayakta durabilmelerinde çok önemli bir rol oynayan finansal performans birçok faktörden etkilenmektedir. Finansal kaldıraçları yüksek ya da büyük ölçekli işletmelerin daha iyi bir finansal performans gösterip göstermediği ise üzerinde durulması gereken konulardan biridir. Bu çalışmanın temel amacı, finansal kaldıraç ve firma büyüklüğünün işletmelerin finansal performansları üzerinde etkili olup olmadığını araştırmaktır. Bu amacı gerçekleştirmek için, BIST Sınai Endeksi’nde işlem gören 136 işletme analize dâhil edilmiştir. Bu amaçları gerçekleştirmek üzere çoklu regresyon analizleri kullanılmış ve finansal kaldıraç ve firma büyüklüğü değişkenlerinin işletmelerin finansal performansları üzerindeki etkisi test edilmiştir. Yapılan analizlerin sonucunda, finansal kaldıraç ve firma büyüklüğünün işletmelerin finansal performansları üzerinde etkili olduğuna ulaşılmıştır.

References

  • Abbasi, A., & Malik, Q. A. (2015). Firms’ size moderating financial performance in growing firms: An empirical evidence from Pakistan. International Journal of Economics and Financial Issues, 5(2), 334-339.
  • Al-Shamaileh, M. O., & Khanfar, S. M. (2014). The effect of the financial leverage on the profitability in the tourism companies. Business and Economic Research, 4(2), 251-264.
  • Banafa, A. S. A. (2016). The effect of leverage, liquidity, and firm size on financial performance of listed non- financial firms in Kenya. Doctor of Philosophy, Jomo Kenyatta University of Agriculture and Technology, Kenya.
  • Beck,T., Demirgüç-Kunt, A., & Maksimovic, V. (2005). Financial and legal constraints to growth: Does firm size matter? The Journal of Finance, 60(1), 137-177.
  • Bui, N. T. H. (2017). The impact of financial leverage on firm performance: A case study of listed oil and gas companies in England. International Journal of Economics, Commerce and Management, 5(6), 477-485.
  • Camelia, B. (2013). Analysis model for return on capital employed. Annals of the “Constantin Brâncuşi”
  • University of Târgu Jiu, Economy Series, No: 1, 82-87. Coase, R. H. (1937). The nature of the firm. Economica, 4(16), 386-405.
  • Chaudhuri, S., Vasigh, B., & Chaudhuri, R. (2014). Estimation of fair rate of return on equity for Delhi international airport. Journal of Airport Management, 9(1), 76-91.
  • Dufera, A. (2010). Financial performance evaluation: A case study of Awash international bank. Mekelle University, Ethiopia.
  • Edesiri, G. O. (2014). Financial leverage behaviour and firm performance: Evidence from publicly quoted companies in Nigeria. Œconomica, 10(4), 99-106.
  • Evgeny, I. (2015). The impact of financial leverage on firm performance: Evıdence from Russia. Journal of
  • Corporate Finance Research, 9(2), 24-36. Hsia, C. C., & Fuller, B. R. (1996). an investigation into the firm size effect: a security market plane approach.
  • Journal of Accounting, Auditing & Finance, 11(1), 131-152. Iqbal, A., Mulani, J., & Kabiraj, S. (2013). Leverage, size of the firm and profitability: A case of Pakistani cement industry. International Journal of Business Insights & Transformation, 7(1), 16-22.
  • Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360.
  • Jiang, R. J., Tao, Q. T., & Santor, M. D. (2010). Research notes and commentaries: Alliance portfolio diversıty and firm performance. Strategic Management Journal, 31, 1136-1144.
  • Kartikasari, D., & Merianti, M. (2016). The effect of leverage and firm size to profitability of public manufacturing companies in Indonesia. International Journal of Economics and Financial Issues, 6(2), 409-413.
  • Kim, M. K. & Burnie, D. A. (2002). The firm size effect and the economic cycle. Journal of Financial Research, (1), 111-124.
  • Ku, Y. Y., & Yen, T. Y. (2016). Heterogeneous effect of financial leverage on corporate performance: A quantile regression analysis of Taiwanese companies. Review of Pacific Basin Financial Markets and Policies, (3), 1-33.
  • Li, M. Y. L., & Hwang, N. C. R. (2011). Effects of firm size, financial leverage and R&D expenditures on firm earnings: An analysis using quantile regression approach. A Journal of Accounting, Finance and Business Studies, 47(2), 182-204.
  • Marete, D. (2015). The relationship between firm size and financial leverage of firms listed at Nairobi securities exchange. The Degree of Master of Business Administration, School of Business, Universıty Of Nairobi, October, Kenya.
  • Modigliani, F., & Miller, M. H. (1958). The cost of capital, corporation finance and the theory of investment. The American Economic Review, 48(3), 261-297.
  • Mule, R. K., Mukras, M. S., & Nzioka, O. M. (2015). Corporate size, profitability and market value: An econometric panel analysis of listed firms in Kenya. European Scientific Journal, 11(13), 376-396.
  • Mutluay, A. H., & Turaboğlu, T. T. (2013). Döviz kuru değişimlerinin firma performansına etkileri: Türkiye örneği. BDDK Bankacılık ve Finansal Piyasalar, 7(1), 59-78.
  • Nirajini, A., & Priya, K. B. (2017). Impact of Capital Structure on Financial Performance of the Listed Trading
  • Companies in Sri Lanka. International Journal of Scientific and Research Publications, 3(5), 1-9. Niresh, J. A., & Velnampy, T. (2014). Firm size and profitability: A study of listed manufacturing firms in Sri
  • Lanka. International Journal of Business and Management, 9(4), 57-64. Olawale, L. S., Ilo, B. M., & Lawal, F. K. (2017). The effect of firm size on performance of firms in Nigeria. The IEB International Journal of Finance, 15, 2-21.
  • Özcan, C., & Ayvaz, B. (2015). Çoklu regresyon yöntemi ile tedarik zinciri performansı ve uygulama derecesinin işletme karlılığı üzerindeki etkisinin incelenmesi. İstanbul Ticaret Üniversitesi Fen Bilimleri Dergisi, 25, 14.
  • Özhan, T. (2015). Borsa ve piyasalar anatomisi. İstanbul: e-Kitap Projesi.
  • Özhan, T. (2016). Borsaya teknik bakış: Açıklamalı terimler ve diyagramlarla, İstanbul: e-Kitap Projesi.
  • Pervan, M., & Višić, J. (2012). Influence of firm size on its business success. Croatian Operational Research Review, 3,213-223.
  • Ramin, A. K., Lizam, M., Zabri, S. M., & Ahmad, M. F. (2017). Firm’s size and solvency performance: Evidence from the Malaysian public listed firms. Journal of Engineering and Applied Sciences, 12(5), 1240-1244.
  • Singh, A. K., & Bansal, P. (2016). Impact of financial leverage on firm's performance and valuation: A panel data analysis. Indian Journal of Accounting, 48(2), 73-80.
  • Stratopoulos, T., & Dehning, B. (2000). Does successful investment in information technology solve the productivity paradox? Information & Management, 38(2), 103-117.
  • Vithessonthi, C., & Tongurai, J. (2015). The effect of leverage on performance: Domestically-oriented versus internationally-oriented firms. Research in International Business and Finance, 34, 265-280.
  • Uzgören, N. (2007). Uyum analizinin teorik esasları ve regresyon analizi ile benzerliğinin grafiksel boyutta karşılaştırılması. Dumlupınar Üniversitesi Sosyal Bilimler Dergisi, 18
There are 35 citations in total.

Details

Primary Language Turkish
Subjects Finance
Journal Section Research Article
Authors

Nihan Caba This is me

Publication Date December 1, 2017
Submission Date October 17, 2017
Published in Issue Year 2017 ICMEB17 Özel Sayısı

Cite

APA Caba, N. (2017). FİNANSAL KALDIRAÇ VE FİRMA BÜYÜKLÜĞÜNÜN FİNANSAL PERFORMANS ÜZERİNE ETKİSİ: BIST SINAİ ENDEKSİNDE İŞLEM GÖREN İŞLETMELER ÜZERİNE BİR UYGULAMA. Uluslararası Yönetim İktisat Ve İşletme Dergisi, 13(13), 796-811.