The Moderating Effect of Board Structure on Investment Efficiency and Firm Value: BIST Example / Yönetim Kurulu Yapısının Yatırım Etkinliği ve Firma Değeri Üzerindeki Moderatör Etkisi: BİST Örneği

Abstract

In this research, this paper examines the moderating effects of board size and board independence on the relationship between investment efficiency and firm value. The sample consists of 269 non-financial firms listed on Borsa Istanbul (BİST) between 2012 and 2021. Firm value is measured using Tobin's Q ratio. The results reveal that there is a positive relationship between investment efficiency and firm value. Moreover, board size is found to have a positive and significant moderating effect on the relationship between investment efficiency and firm value. Accordingly, as the size of the board of directors increases, the effect of investment efficiency on firm value also increases. However, board independence does not have a significant moderating effect on this relationship. These findings contribute to an understanding of how board structure affects the impact of investment efficiency on firm value, thereby contributing to the corporate finance literature.

Keywords

• Investment Efficiency
• Firm Value
• Corporate Governance
• Board Structure
• Panel Data Analysis

Yönetim Kurulu Yapısının Yatırım Etkinliği ve Firma Değeri Üzerindeki Moderatör Etkisi: BİST Örneği / The Moderating Effect of Board Structure on Investment Efficiency and Firm Value: BIST Example

Öz

Bu araştırmada, yönetim kurulu büyüklüğü ve yönetim kurulu bağımsızlığının yatırım etkinliği ve firma değeri arasındaki ilişki üzerindeki ılımlaştırıcı etkileri incelenmiştir. Örneklem, 2012-2021 yılları arasında Borsa İstanbul'da (BİST) işlem gören 269 finans sektörü dışındaki firmadan oluşmaktadır. Firma değeri Tobin Q oranı kullanılarak ölçülmüştür. Sonuçlar, yatırım etkinliği ile firma değeri arasında pozitif bir ilişki olduğunu ortaya koymuştur. Ayrıca, yönetim kurulu büyüklüğünün yatırım etkinliği ve firma değeri arasındaki ilişki üzerinde pozitif ve anlamlı bir ılımlaştırıcı etkiye sahip olduğu bulunmuştur. Buna göre yönetim kurulu büyüklüğü arttıkça yatırım etkinliğinin firma değeri üzerindeki etkisi de artmaktadır. Ancak, yönetim kurulu bağımsızlığı bu ilişki üzerinde anlamlı bir ılımlaştırıcı etki göstermemiştir. Bu bulgular, yönetim kurulu yapısının yatırım etkinliğinin firma değeri üzerindeki etkisini nasıl etkilediğinin anlaşılmasına katkıda sağlamakta ve böylelikle kurumsal finans literatürüne katkıda bulunmaktadır.

Anahtar Kelimeler

• Yatırım Etkinliği
• Firma Değeri
• Kurumsal Yönetim
• Yönetim Kurulu Yapısı
• Panel Veri Analizi

References

1. Abdi, Y., Li, X., and Càmara-Turull, X. (2020). Impact of Sustainability on Firm Value and Financial Performance in the Air Transport Industry. Sustainability, 12(23), 1-23.
2. Abedin, S. H., Haque, H., Shahjahan, T., and Kabir, M. N. (2022). Institutional Ownership and Firm Performance: Evidence from an Emerging Economy. Journal of Risk and Financial Management, 15(12), 1-17.
3. Ahmed, K., Hossain, M., and Adams, M. B. (2006). The Effects of Board Composition and Board Size on the Informativeness of Annual Accounting Earnings. Corporate Governance: An International Review, 14(5), 418-431.
4. Akçay, A. Ö. (2022). İthiyatlılık ve Yatırım Etkinliği: Borsa İstanbul Firmaları Üzerine Bir Araştırma. Pamukkale Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 51, 79-92.
5. Alsayegh, M. F., Rahman, R. A., and Homayoun, S. (2023). Corporate Sustainability Performance and Firm Value through Investment Efficiency. Sustainability, 15(1), 1-13.
6. Alzoubi, E. S. (2012). Board Characteristics And Financial Reporting Quality Among Jordanian Listed Companies: Proposing Conceptual Framework. Asian Journal of Finance and Accounting, 4(1), 245-258.
7. Amoah, B. (2022 ). Does Efficiency Influence Firm Investment Size? Evidence from Ghana. Heliyon, 8(8), 1-10.
8. Badu, E. A., and Appiah, K. O. (2017). The Impact Of Corporate Board Size On Firm Performance: Evidence From Ghana And Nigeria. Research in Business and Management, 4(2), 1-12.

9. Baker, H. K., Powell, G. E., and Veit, E. T. (2002). Revisiting The Dividend Puzzle: Do All Of The Pieces Now Fit? Review of Financial Economics, 11(4), 241-261.
10. Balakrishnan, S., and Koza, M. P. (1993). Information Asymmetry, Adverse Selection And Joint-Ventures: Theory And Evidence. Journal Of Economic Behavior Ve Organization, 20(1), 99-117.
11. Baltagi, B. H., Bratberg, E., and Holmas, T. H. (2005 ). A Panel Data Study Of Physicians' Labor Supply: The Case Of Norway. Health Econ, 14(10), 1035-1045.
12. Banos-Caballero, S., Garcia-Teruel, P., and Martinez-Solano., P. (2014). Working Capital Management, Corporate Performance, And Financial Constraints. Journal of Business Research, 67(3), 332–338.
13. Bechir, C. M., and Jouirou, M. (2021). Investment Efficiency And Corporate Governance: Evidence From Asian Listed Firms. Journal of Sustainable Finance ve Investment, 1-23, Access Adress: https://www.tandfonline.com/doi/full/10.1080/20430795.2021.1974241
14. Belkhir, M. (2009). Board Of Directors' Size And Performance In The Banking Industry. International Journal of Managerial Finance, 5(2), 201-221.
15. Biddle, G. C., Hilary, G., (2009): Verdi, R. S. (2009). How Does Financial Reporting Quality Relate To Investment Efficiency? Journal of Accounting and Economics, 48(2-3), 112-131.
16. Bimo, I. D. and Silalahi, E. E., (2009). Kusumadewi, N. L. (2020). Corporate Governance And Investment Efficiency In Indonesia: The Moderating Role Of Industry Competition. Journal of Financial Reporting and Accounting, 20(2), 371-384.
17. Black, B. S., and Khanna, V. S. (2007). Can Corporate Governance Reforms Increase Firm Market Values? Event Study Evidence from India. Journal of Empirical Legal Studies, 4(4), 749–796.
18. Black, B., and Kim, W. (2012). The Effect Of Board Structure On Firm Value: A Multiple Identification Strategies Approach Using Korean Data. 104(1), 203-226.
19. Cano Rodríguez, M., and Sánchez Alegría, S. (2012). The Value of Audit Quality in Public and Private Companies: Evidence from Spain. Journal of Management and Governance, 16(4), 683-706.
20. Cengiz, S., Dinç, Y. ve Tosunoğlu, B. (2017). Impact Of Financial Reporting Quality On Investment Efficiency: An Application in İstanbul Stock Exchange. International Congress Of Eurasian Social Sciences (ICOESS) Özel Sayısı, 8(8), 421-439.
21. Chen, S., Sun, Z., Tang, S., and Wu, D. (2011). Government Intervention And Investment Efficiency: Evidence From China. Journal of Corporate Finance, 17(2), 259-271.
22. Choa, S., ve Rui, O. M. (2009). Exploring The Effects Of China’s Two-Tier Board System And Ownership Structure On Firm Performance And Earnings Informativeness. Asia-Pacific Journal of Accounting ve Economics, 16, 95–118.
23. Chrisman, J. J., Chua, J. H., and Litz, R. A. (2004). Comparing The Agency Costs Of Family And Non–Family Firms: Conceptual Issues And Exploratory Evidence. Entrepreneurship Theory And Practice, 28(4), 335-354.
24. Coase, R. H. (1960). The Problem Of Social Cost. Journal of Law and Economics, 3, 1-44.
25. Coles, J. L., Daniel, N. D., and Naveen, L. (2008). Boards: Does One Size Fit All. Journal Of Financial Economics, 87(2), 329-356.
26. Dahya, J., Dimitrov, O., and McConnell, J. J. (2008). Dominant Shareholders, Corporate Boards, And Corporate Value: A Cross-Country Analysis. Journal of Financial Economics, 87(1), 73-100.
27. Dalton, D. R., Daily, C. M., Ellstrand, A. E., and Johnson, J. L. (1998). Meta-Analytic Reviews of Board Composition, Leadership Structure, and Financial Performance. Strategic Management Journal, 19(3), 269-290.
28. Dalton, D., Daily, C., Johnson, J., and Ellstrand, A. (1999). Number of directors and financial performance: A meta-analysis. Academy Of Management Journal, 42(6), 674-686.
29. Dechow, P. M., Sloan, R. G., and Sweeney., A. P. (1996). Causes and Consequences of Earnings Manipulation: An Analysis of Firms Subject to Enforcement Actions by the SEC. Contemporary Accounting Research, 13(1), 1-36.
30. Eisenhardt, K. M. (1989). Agency Theory: An Assessment And Review. Academy Of Management Review, 14(1), 57-74.
31. Fama, E. F., ve Jensen, M. C. (1983). Separation Of Ownership And Control. The Journal Of Law And Economics, 26(23), 301-325.
32. Farooq, K., Chui, C. M., ve Azeem, M. (2021). Board Centrality And Investment Efficiency. Asia-Pacific Journal Of Accounting and Economics, 30(3), 1-34.
33. Góis, C. G. (2009). Financial Reporting Quality And Corporate Governance: The Portuguese Companies Evidence. Proceedings Of The 32nd Annual Congress European Accounting Association, 1-25.
34. Guest, P. M. (2009). The Impact Of Board Size On Firm Performance: Evidence From The UK. The European Journal Of Finance, 15(4), 385-404.
35. Harrison, P. D., and Harrell., A. (1993). Impact Of “Adverse Selection” On Managers' Project Evaluation Decisions. Academy Of Management Journal, 16(3), 635-643.
36. Hermalin, B., and Weisbach, M. S. (2003). Boards Of Directors As An Endogenously Determined Institution: A Survey Of Economic Literature. Economic Policy Review, 1, 7-26.
37. Hoechle, D. (2007). Robust Standard Errors For Panel Regressions With Cross-Sectional Dependence. The Stata Journal, 7(3), 281-312.
38. Hsiao, C. (2007). Panel Data Analysis—Advantages And Challenges. Test, 16(1), 1-22.
39. Jensen, M. C. (1993). The Modern Industrial Revolution, Exit, And The Failure Of Internal Control Systems. The Journal Of Finance, 48(3), 831-880.
40. Jensen, M. C., and Meckling., W. H. (1976). Theory Of The Firm: Managerial Behavior, Agency Costs And Ownership Structure. Journal Of Financial Economics , 3(4), 305-360.
41. Jensen, M. C., and Ruback, R. S. (1983). The Market For Corporate Control: The Scientific Evidence. Journal Of Financial Economics, 11(1-4), 5-50.
42. Johl, S. K., Johl, S., and Cooper, B. (2015 ). Board Characteristics And Firm Performance: Evidence From Malaysian Public Listed Firms. Journal Of Economics Business And Management, 3(2), 239-243.
43. Kaplan, S. N., and Reishus, D. (1990). Outside Directorships And Corporate Performance. Journal Of Financial Economics, 27(2), 389-410.
44. Kose, J., and Litov, L. (2010). Managerial Entrenchment And Capital Structure: New Evidence. Journal Of Empirical Legal Studies, 7(4), 693–742.
45. Lee, J. (2021). Entrepreneurship In Singapore (Cilt 5). The Singapore Economy: Dynamism And Inclusion.
46. Leung, S., Richardson, G., and Jaggi, B. (2014). Corporate Board And Board Committee Independence, Firm Performance, And Family Ownership Concentration: An Analysis Based On Hong Kong Firms. Journal of Contemporary Accounting & Economics, 10(1), 16-31.
47. Lipton, M., and Lorsch., J. W. (1992). A Modest Proposal For Improved Corporate Governance. The Business Lawyer, 48(1), 59-77.
48. Lu, J., and Wang, W. (2015). Board Independence And Corporate Investments. Review Of Financial Economics, 24, 52-64.
49. Med Bechir, C., ve Jouirou, M. (2021). Investment Efficiency And Corporate Governance: Evidence From Asian Listed Firms. Journal Of Sustainable Finance Ve Investment, Access Adress: https://www.tandfonline.com/doi/epdf/10.1080/20430795.2021.1974241?needAccess=true&role=button
50. Mili, M., ve Abid, S. (2017). Moral Hazard And Risk-Taking Incentives In Islamic Banks, Does Franchise Value Matter. International Journal of Islamic and Middle Eastern Finance and Management, 10(1), 42-59.
51. Millstein, I. M., and MacAvoy, P. W. (1998). The Active Board Of Directors And Performance Of The Large Publicly Traded Corporation. Columbia Law Review, 98(5), 1283-1322.
52. Modigliani, F., and Miller, M. (1958). The Cost of Capital, Corporation Finance and the Theory of Investment. American Economic Review, 48(3), 261-297.
53. Nakano, M., and Nguyen., P. (2013). Foreign Ownership And Firm Performance: Evidence From Japan's Electronics Industry. Applied Financial Economics, 23(1), 41-50.
54. Nor, N., Nawawi, A., and Salin, A. (2017). The Influence of Board Independence, Board Size and Managerial Ownership on Firm Investment Eficiency. Pertanika Journal of Social Science and Humanities, 25(3), 1039-1058.
55. Park, S. (2022). Do Bank Capital Requirements Make Resource Allocation Suboptimal? Journal of Economic Analysis, 1(2), 35-49.
56. Peress, J. (2010). Product Market Competition, Insider Trading, And Stock Market Efficiency. The Journal of Finance, 65(2), 1-43.
57. Richardson, S. (2006). Over-Investment Of Free Cash Flow. Review of Accounting Studies, 11, 159–189.
58. Safi, A., Chen, Y., Qayyum, A., Wahab, S., and Amin, M. (2023). How Does Corporate Social And Environmental Responsibility Contribute To Investment Efficiency And Performance? Evidence From The Financial Sector Of China. Economic Research, 36(2), 1-23.
59. Salehi, M., Zimon, G., Arianpoor, A., and Gholezoo, F. E. (2022). The Impact Of Investment Efficiency On Firm Value And Moderating Role Of Institutional Ownership And Board Independence. Journal Of Risk And Financial Management, 15(170), 1-13.
60. Slinker, B. K., and Glantz, S. A. (1985). Multiple Regression For Physiological Data Analysis: The Problem Of Multicollinearity. American Journal Of Physiology-Regulatory, Integrative And Comparative Physiology, 249(1), R1-R12.
61. Smirlock, M., Gilligan, T., ve Marshall., W. (1984). Tobin’s q and the Structure-Performance Relationship. The American Economic Review, 74(5), 1051–1060.
62. Stein, J. C. (2003). Agency, Information And Corporate Investment. Handbook Of The Economics Of Finance, 111-165.
63. Succi, G., Pedrycz, W., Djokic, S., Zuliani, P., & Russo, B. (2005). An Empirical Exploration Of The Distributions Of The Chidamber And Kemerer Object-Oriented Metrics Suite. Empirical Software Engineering, 10, 81-104.
64. Suhadak, S. K. (2018). Stock Return And Financial Performance As Moderation Variable In Influence Of Good Corporate Governance Towards Corporate Value. Asian Journal Of Accounting Research, 4(1), 18-34.
65. Tatoğlu, F. Y. (2016). Panel Veri Ekonometrisi: Stata Uygulamalı. İstanbul: Beta Yayınları.
66. Ullah, I., Zeb, A., Khan, M. A., ve Xiao, W. (2020). Board Diversity And Investment Efficiency: Evidence From China. Corporate Governance, 20(6), 1105-1134.
67. Wijaya, A. L. (2020). Profitability, Audit Quality, And Firm Value: Case On Indonesian Manufacturing Companies. Contabilidad y Negocios, 15(30), 43-61.
68. Yermack, D. (1996). Higher Market Valuation Of Companies With A Small Board Of Directors. Journal Of Financial Economics, 40(2), 185-211.
69. Zhang, Y., ve Michael, M. (2023). The Role Of Director Incentives In Investment Efficiency. Corporate Governance, 23(4), 920-943.