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FİNANSAL RİSK YÖNETİMİ VE FİRMA PERFORMANSI: AVRUPA SINIR ÖTESİ BİRLEŞME VE SATINALMALARINDAN BULGULAR

Year 2021, Volume: 16 Issue: 56, 701 - 718, 31.07.2021
https://doi.org/10.14783/maruoneri.788480

Abstract

Finansal piyasalarda oynaklığın artması nedeniyle, özellikle dünyadaki büyük şirketler arasında finansal türev araçların (forward, futures, option, and swap) kullanımı yaygınlaşmıştır. Piyasa riski üç kategoriye ayrılabilir: döviz kuru riski, faiz oranı riski ve emtia fiyat riski. Şirketler, finansal türev araçları kullanarak bu riskleri yönetebilirler. Uluslararası Finansal Raporlama Standartları (UFRS), şirketlerin finansal araçlarıyla ilgili detaylı bilgileri finansal raporlarında açıklamasını zorunlu kılmaktadır. Finansal türev araçlara ilişkin finansal raporlardaki ilgili detaylar, türev araç kullanımının firma değeri üzerindeki etkisi üzerine ampirik araştırma yapılmasını mümkün kılmaktadır. Riskten korunma ve firma değeri arasındaki ilişki üzerindeki farklı bulguların yanı sıra, riskten korunmanın firma faaliyetleri üzerindeki etkisini sorgulayan ampirik araştırmalar beklenmedik bir şekilde eksiktir. Bu çalışmada, bir firmanın finansal riskini değiştiren önemli bir firma operasyonu olan sınır ötesi birleşme ve satın almaları incelemeyi hedeflemekteyiz. Riskten korunmanın, Avrupa’daki sınır ötesi birleşme ve satın alma yoluyla firma performansı üzerindeki etkisini inceleyerek, risk yönetiminin firma performansını etkileyip etkilemediği ve ne şekilde etkilediğini bulmayı amaçlıyoruz. 2007- 2019 yılları arasında 14 farklı gelişmiş Avrupa ülkesindeki şirketler tarafından yürütülen 537 sınır ötesi birleşme ve satın alma verisi ile, finansal riskten korunma programlarına sahip olan firmaların, bu tür programları kullanmayanlara kıyasla daha yüksek kümülatif anormal getirilere sahip olduğuna dair kanıtlar buluyoruz. Bu çalışmada araştırma yöntemleri olarak olay çalışması, T-test ve Mann-Whitney Test kullanılmıştır. Ayrıca, sonuçlarımız, türev araç kullanıcılarının, kullanmayanlara oranla anlaşma tamamlama sürelerinin daha uzun sürdüğünü göstermektedir. Genel olarak, bu çalışma kurumsal finansal riskten korunma ve şirket performansı arasındaki bağlantıya ilişkin Avrupa bölgesine ilişkin bulgular sunmaktadır. Avrupa’ya ilişkin bulgularımız daha önce ABD’de yapılan çalışmayı destekler niteliktedir.

References

  • Ahern, K. R., & Sosyura, D. (2014). Who writes the news? Corporate press releases during merger negotiations. Journal of Finance, 69, 241-291.
  • Allayannis, G., & Ihrig, J. (2001). Exposure and markups. Review of Financial Studies, 14, 805-835.
  • Allayannis, G., & Ofek, E. (2001). Exchange rate exposure, hedging, and the use of foreign currency derivatives. Journal of International Money and Finance, 20, 273-296.
  • Allayannis, G., & Weston, J. P. (2001). The Use of Foreign Currency Derivatives and Firm Market Value. The Review of Financial Studies, 14(1), 243-276.
  • Allayannis, G., Lel, U., & Miller, D. (2012). The use of foreign currency derivatives, corporate governance, and firm value around. Journal of International Economics, 87, 65-79.
  • Arslan, H. B., & Simsir, S. A. (2013). Measuring takeover premiums in cross-border M&As: Insights from Turkey. Emerging Markets Finance and Trade, Forthcoming. Retrieved from http://ssrn.com/abstract=2290079
  • Bartram, S., Brown, G., & Conrad, J. (2011). The Effects of Derivatives on Firm Risk and Value. Journal of Financial and Quantitative Analysis, 46(4), 967-999.
  • Bhagwat, V., & Dam, R. (2014). Asymmetric interim risk and deal terms in corporate mergers and acquisitions. Working Paper. University of Oregon and University of Colorado at Boulder.
  • Bhagwat, V., Dam, R., & Harford, J. (2016). The real effects of uncertainty on merger activity. Review of Financial Studies, 29(11), 3000-3034.
  • Campello, M., Lin, C., Ma, Y., & Zou, H. (2011). The Real and Financial Implications of Corporate Hedging. The Journal of Finance, 66(5), 1615-1647.
  • Carter, D., Rogers, D., & Simkins, B. (2006). Hedging and Value in the U.S. Airline Industry. Journal of Applied Corporate Finance, 18(4), 21-33.
  • Chen J., & King T. H. D. (2014). Corporate hedging and the cost of debt. Journal of Corporate Finance, 29, 221- 245.
  • Chen, Z., Han, B., & Zeng, Y. (2017). Financial hedging and firm performance: evidence from cross-border mergers and acquisitions. European Financial Management, 23, 415-458.
  • Demarzo, P., & Duffie, D. (1995). Corporate Incentives for Hedging and Hedge Accounting. The Review of Financial Studies, 8(3), 743-771.
  • Eun, C., Kolodny, R., & Scheraga, C. (1996). Cross-Border Acquisitions and Shareholder Wealth: Tests of the Synergy and Internalization Hypotheses. Journal of Banking and Finance, 20(9), 1559-1582.
  • Froot, K., Scharfstein, D., & Stein, J. (1993). Risk Management: Coordinating Corporate Investment and Financing Policies. The Journal of Finance, 48(5), 1629-1658.
  • Furfine, C. H., & Rosen, R. J. (2011). Mergers increase default risk. Journal of Corporate Finance, 17, 832-849.
  • Gay, G. D., Lin, C.-M., & Smith, S. D. (2011). Corporate derivatives use and the cost of equity. Journal of Banking and Finance, 35, 1491-1506.
  • Graham, J., & Rogers, D. (2002). Do firms hedge in response to tax incentives? The Journal of Finance, 57(2), 815-839.
  • Harford, J. (2005). What drives merger waves? Journal of Financial Economics, 77, 529-560.
  • Jin, Y., & Jorion, P. (2006). Firm Value and Hedging: Evidence from U.S. Oil and Gas Producers. The Journal of Finance, 61(2), 893-919.
  • Leland, H. (1998). Agency Costs, Risk Management, and Capital Structure. The Journal of Finance, 53(4), 1213- 1243.
  • Lin, C., Officer, M. S., & Shen, B. (2014). Currency appreciation shocks and shareholder wealth creation in cross-border mergers and acquisitions. Working Paper. University of Hong Kong, Loyola Marymount University and Chinese University of Hong Kong.
  • Martynova, M., Oosting, S., & Renneboog, L. (2007). The long-term operating performance of European Acquisitions. Gregoriou, G., & Renneboog, L. (Eds.). International Mergers and Acquisitions Activity since 1990: Quantitative Analysis and Recent Research. (pp.1-40). Massachusetts: Elsevier.
  • Mayers, D., & Smith, C. W. (1982). On the corporate demand for insurance. Journal of Business, 55, 281-296.
  • Modigliani, F., & Miller, M. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 48(3), 261-297.
  • Moeller, S. B., & Schlingemann, F. P. (2005). Global diversification and bidder gains: A comparison between cross-border and domestic acquisitions. Journal of Banking & Finance, 29, 533-564.
  • Pérez-González, F., & Yun, H. (2013). Risk management and firm value: Evidence from weather derivatives. Journal of Finance, 68, 2143-2176.
  • Pritamani, M. D., Shome, D. K. & Singal, V. (2004). Foreign exchange exposure of exporting and importing firms. Journal of Banking and Finance, 28, 1697-1710.
  • Smith, C., & Stulz, R. (1985). The Determinants of Firms’ Hedging Policies. The Journal of Financial and Quantitative Analysis, 20(4), 391-405.
  • Stulz, R. M. (1984). Optimal hedging policies. Journal of Financial and Quantitative Analysis, 19, 127-140. Sudarsanam, S. (2010). Creating Value from Mergers and Acquisitions: The Challenges (Second Edition). Harlow: Prentice Hall.
  • Sudarsanam, S., & Mahate, A. A. (2006). Are friendly acquisitions too bad for shareholders and managers? Longterm value creation and top management turnover in hostile and friendly acquirers. British Journal of Management, 17 (Special Issue), 7-30.
  • Tuch, C., & O’Sullivan, N. (2007). The impact of acquisitions on firm performance: A review of the evidence. International Journal of Management Reviews, 9, 141-170.
  • Tufano, P. (1996). Who Manages Risk? An Empirical Examination of Risk Management Practices in the Gold Mining Industry. The Journal of Finance, 51(4), 1097-1137.

FINANCIAL RISK MANAGEMENT AND FIRM PERFORMANCE: EVIDENCE FROM EUROPEAN CROSS-BORDER MERGERS AND ACQUISITIONS

Year 2021, Volume: 16 Issue: 56, 701 - 718, 31.07.2021
https://doi.org/10.14783/maruoneri.788480

Abstract

As a result of the increasing volatility in financial markets, the use of financial derivative instruments (forward, futures, option, and swap) has become widespread particularly between large firms around the world. Market risk can be grouped into three categories: exchange rate risk, interest rate risk and commodity price risk. By employing financial derivatives, companies can manage these risks. It is required by International Financial Reporting Standards (IFRS) to reveal their financial positions on financial instruments in their financial reports. The related details in financial reports regarding financial derivatives make it possible to do empirical research on the impact of derivative use on firm value. Along with the mixed results on the relationship among hedging and firm value, empirical research that question the impact of hedging on firm operating activities have been unexpectedly missing. In this study, we aim to examine a significant type of firm operations, cross-border mergers and acquisitions, which is well known for changing a firm’s financial risk exposure. By studying the effect of hedging on firm performance through cross-border M&As, we aim to find out whether and in what way risk management affects firm performance. With a sample of 537 cross-border mergers and acquisitions (M&As) conducted by 14 different developed European companies between 2007 and 2019, we find evidence that acquirers with financial hedging programs have higher cumulative abnormal returns (CARs) than those without such programs around deal announcements. Event study, T-test and Mann-Whitney Test are used as research methods in this study. Additionally, our results show that derivatives users experience longer deal completion times than non-users. Overall, this study provides findings for the European region on the connection between corporate financial hedging and firm performance. Our findings regarding Europe support the previous study in the USA.

References

  • Ahern, K. R., & Sosyura, D. (2014). Who writes the news? Corporate press releases during merger negotiations. Journal of Finance, 69, 241-291.
  • Allayannis, G., & Ihrig, J. (2001). Exposure and markups. Review of Financial Studies, 14, 805-835.
  • Allayannis, G., & Ofek, E. (2001). Exchange rate exposure, hedging, and the use of foreign currency derivatives. Journal of International Money and Finance, 20, 273-296.
  • Allayannis, G., & Weston, J. P. (2001). The Use of Foreign Currency Derivatives and Firm Market Value. The Review of Financial Studies, 14(1), 243-276.
  • Allayannis, G., Lel, U., & Miller, D. (2012). The use of foreign currency derivatives, corporate governance, and firm value around. Journal of International Economics, 87, 65-79.
  • Arslan, H. B., & Simsir, S. A. (2013). Measuring takeover premiums in cross-border M&As: Insights from Turkey. Emerging Markets Finance and Trade, Forthcoming. Retrieved from http://ssrn.com/abstract=2290079
  • Bartram, S., Brown, G., & Conrad, J. (2011). The Effects of Derivatives on Firm Risk and Value. Journal of Financial and Quantitative Analysis, 46(4), 967-999.
  • Bhagwat, V., & Dam, R. (2014). Asymmetric interim risk and deal terms in corporate mergers and acquisitions. Working Paper. University of Oregon and University of Colorado at Boulder.
  • Bhagwat, V., Dam, R., & Harford, J. (2016). The real effects of uncertainty on merger activity. Review of Financial Studies, 29(11), 3000-3034.
  • Campello, M., Lin, C., Ma, Y., & Zou, H. (2011). The Real and Financial Implications of Corporate Hedging. The Journal of Finance, 66(5), 1615-1647.
  • Carter, D., Rogers, D., & Simkins, B. (2006). Hedging and Value in the U.S. Airline Industry. Journal of Applied Corporate Finance, 18(4), 21-33.
  • Chen J., & King T. H. D. (2014). Corporate hedging and the cost of debt. Journal of Corporate Finance, 29, 221- 245.
  • Chen, Z., Han, B., & Zeng, Y. (2017). Financial hedging and firm performance: evidence from cross-border mergers and acquisitions. European Financial Management, 23, 415-458.
  • Demarzo, P., & Duffie, D. (1995). Corporate Incentives for Hedging and Hedge Accounting. The Review of Financial Studies, 8(3), 743-771.
  • Eun, C., Kolodny, R., & Scheraga, C. (1996). Cross-Border Acquisitions and Shareholder Wealth: Tests of the Synergy and Internalization Hypotheses. Journal of Banking and Finance, 20(9), 1559-1582.
  • Froot, K., Scharfstein, D., & Stein, J. (1993). Risk Management: Coordinating Corporate Investment and Financing Policies. The Journal of Finance, 48(5), 1629-1658.
  • Furfine, C. H., & Rosen, R. J. (2011). Mergers increase default risk. Journal of Corporate Finance, 17, 832-849.
  • Gay, G. D., Lin, C.-M., & Smith, S. D. (2011). Corporate derivatives use and the cost of equity. Journal of Banking and Finance, 35, 1491-1506.
  • Graham, J., & Rogers, D. (2002). Do firms hedge in response to tax incentives? The Journal of Finance, 57(2), 815-839.
  • Harford, J. (2005). What drives merger waves? Journal of Financial Economics, 77, 529-560.
  • Jin, Y., & Jorion, P. (2006). Firm Value and Hedging: Evidence from U.S. Oil and Gas Producers. The Journal of Finance, 61(2), 893-919.
  • Leland, H. (1998). Agency Costs, Risk Management, and Capital Structure. The Journal of Finance, 53(4), 1213- 1243.
  • Lin, C., Officer, M. S., & Shen, B. (2014). Currency appreciation shocks and shareholder wealth creation in cross-border mergers and acquisitions. Working Paper. University of Hong Kong, Loyola Marymount University and Chinese University of Hong Kong.
  • Martynova, M., Oosting, S., & Renneboog, L. (2007). The long-term operating performance of European Acquisitions. Gregoriou, G., & Renneboog, L. (Eds.). International Mergers and Acquisitions Activity since 1990: Quantitative Analysis and Recent Research. (pp.1-40). Massachusetts: Elsevier.
  • Mayers, D., & Smith, C. W. (1982). On the corporate demand for insurance. Journal of Business, 55, 281-296.
  • Modigliani, F., & Miller, M. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. The American Economic Review, 48(3), 261-297.
  • Moeller, S. B., & Schlingemann, F. P. (2005). Global diversification and bidder gains: A comparison between cross-border and domestic acquisitions. Journal of Banking & Finance, 29, 533-564.
  • Pérez-González, F., & Yun, H. (2013). Risk management and firm value: Evidence from weather derivatives. Journal of Finance, 68, 2143-2176.
  • Pritamani, M. D., Shome, D. K. & Singal, V. (2004). Foreign exchange exposure of exporting and importing firms. Journal of Banking and Finance, 28, 1697-1710.
  • Smith, C., & Stulz, R. (1985). The Determinants of Firms’ Hedging Policies. The Journal of Financial and Quantitative Analysis, 20(4), 391-405.
  • Stulz, R. M. (1984). Optimal hedging policies. Journal of Financial and Quantitative Analysis, 19, 127-140. Sudarsanam, S. (2010). Creating Value from Mergers and Acquisitions: The Challenges (Second Edition). Harlow: Prentice Hall.
  • Sudarsanam, S., & Mahate, A. A. (2006). Are friendly acquisitions too bad for shareholders and managers? Longterm value creation and top management turnover in hostile and friendly acquirers. British Journal of Management, 17 (Special Issue), 7-30.
  • Tuch, C., & O’Sullivan, N. (2007). The impact of acquisitions on firm performance: A review of the evidence. International Journal of Management Reviews, 9, 141-170.
  • Tufano, P. (1996). Who Manages Risk? An Empirical Examination of Risk Management Practices in the Gold Mining Industry. The Journal of Finance, 51(4), 1097-1137.
There are 34 citations in total.

Details

Primary Language English
Journal Section Makale Başvuru
Authors

Ece Kozol 0000-0002-6428-7501

Jale Oran This is me 0000-0001-8976-2893

Publication Date July 31, 2021
Published in Issue Year 2021 Volume: 16 Issue: 56

Cite

APA Kozol, E., & Oran, J. (2021). FINANCIAL RISK MANAGEMENT AND FIRM PERFORMANCE: EVIDENCE FROM EUROPEAN CROSS-BORDER MERGERS AND ACQUISITIONS. Öneri Dergisi, 16(56), 701-718. https://doi.org/10.14783/maruoneri.788480

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Öneri

Marmara UniversityInstitute of Social Sciences

Göztepe Kampüsü Enstitüler Binası Kat:5 34722  Kadıköy/İstanbul

e-ISSN: 2147-5377