THE EFFECT OF DERIVATIVE INSTRUMENT USE ON FIRM PERFORMANCE AND VALUE: A STUDY ON BUSINESSES OPERATING ON BORSA ISTANBUL
Abstract
The objective of this research is to explore how the use of derivatve instruments influences corporate performance and frm value. To this end, the study analyzes data from 183 non-financal companies listed on Borsa Istanbul over the period from 2015 to 2021. Return on Assets (ROA) and Return on Equity (ROE) are employed as indicators of frm performance, while Tobin’s Q is used to represent frm value. The main explanatory variable is the use of derivatve instruments, with leverage ratio, frm size, and frm age incorporated as control variables. Findings from the panel data analysis indicate that derivatve usage is negatively and significantly associated with both ROA and Tobin’s Q, whereas no significant relationship is found between derivatve usage and ROE.
Keywords
Kaynakça
- Adam, T.R., Fernando, C.S. & Salas, J.M. (2017). Why do firms engage in selective hedging? Evidence from the gold mining industry. Journal of Banking and Finance 77, 269–282.
- Afza, T., Alam, A. (2016). Foreign Currency Derivates and Firm Value. European Online Journal of Natural and Social Sciences, 5(1), 1-14.
- Ahmed, E. R., Islam, A., Zuqibeh, A., & Alabdullah, T. T. Y. (2014). Risks management in Islamic financial instruments. Advances in Environmental Biology, 402-406.
- Akpınar, O., & Fettahoğlu, A. (2016). Does the use of derivates affect firm value? Evidence from Turkey. Journal of transnational management, 21(2), 53-61.
- Aksoy, E. E. A., & Şengül, F. B. (2021). Türev araç kullanımının firma performansı üzerine etkisi: BİST imalat sanayi firmaları uygulaması. Ömer Halisdemir Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 14(3), 1006-1017.
- Alam, N. & Gupta, A. (2018). Does hedging enhance firm value in good and bad times. International Journal of Accounting and Information Management, 26(1), 132-152.
- Alan, B., & Aybars, A. (2021). How does the use of derivates affect firms’ financial performance in turkish non-life insurance industry?. Journal of Research in Economics, 5(2), 117-128.
- Allayannis, G., Lel, U. & Miller, D.P. (2012). The use of foreign currency derivates, corporate governance, and firm value around the world. Journal of International Economics, 87(1), 65-79.
- Ayadi, M., Cyr, D., Lazrak, S. & Lu, Z. (2024). Firm value and the use of financial derivates: evidence from developed countries. Review of Financial Economics, 42, 258-280.
- Aydın, E., & Tanrıöven, C. (2024). Effect of using derivates on risk management, financial performance and firm value. Uluslararası Yönetim İktisat ve İşletme Dergisi, 20(1), 86-107.