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EFFECT OF INVESTMENT AND FİNANCİNG DECİSİONS ON FİRM VALUE; EXAMPLE OF BIST INDUSTRİAL INDEX

Year 2020, Volume: 13 Issue: 2, 13 - 24, 31.12.2020

Abstract

The purpose of this study is to investigate the effect of investment and financing decisions on firm value. Productivity and profitability ratios representing investment decisions, leverage ratio and current ratio representing financial decisions, firms representing firm value were chosen as the last trading day share values. Investment and financing decisions and the impact of the 2008 global crisis on the firm value were tested for 100 firms operating in the Borsa Istanbul Industrial Index, using the annual data for the period 2003-2018 and the fixed effects panel data method. According to empirical findings, asset turnover rate, return on assets, intangible assets, current ratio and profit per share variables positively and significantly affect firm value. Leverage ratio, debt turnover rate, stock turnover rate and crisis variable affect the firm value negatively and significantly. In addition, it was concluded that the effects of the receivable turnover rate and firm size variables on the firm value are meaningless.

References

  • Akgüç, Ö. (2011) “Financial Management”, İstanbul: Avcıol Publishing.
  • Akyüz, K.C. ve Yıldırım, İ. (2019) “Relationship Between Financial Ratios and Firm Value; An Application in Paper and Paper Products Industry” Düzce University Journal of Science and Technology, 7 (2019) 1778-1792.
  • Aras, G., Kutlu Furtuna, Ö. & Mutlu Yıldırım, F. (2017) “The Impact of Investment and Financing Decisions on Market Value in Turkey” Journal of Business Research Turk, 9/4, 120-138
  • Arkan, F. (2010), Financial Structure and Firm Value Relationship: A Research on Firms Registered in ISE, Unpublished Master Thesis, Selcuk University Institute of Social Sciences.
  • Ayrıçay, Y. & Türk, V. E. (2014) “The Relationship Between Financial Ratios And Firm Value: An Enforcement In Borsa Istanbul”, Journal of Accounting and Finance, 64: 53-70.
  • Baltagi, B. (2005). Econometric Analysis of Panel Data. New Yoek: John Wiley & Sons INC.
  • Betz, F. 2011. Managing Technological İnnovation: Competitive Advantage From Change. Wiley-Inter science.
  • Biçen, Ö.F. & Sezgin, H. (2017) “The Effects Of Fınancıal Ratıos On Fırm Value: A Panel Data Analysıs For Borsa İstanbul It Sector” Journal of Management and Economic Research.
  • Birgili, E. & Düzer, M. (2010) “The Relationship Between The Rates Which Are Used In Financial Analysis And Firm Value An Application in Istanbul Stock Exchange”, Journal of Accounting and Finance, 46: 74- 83.
  • Breusch, T., & Pagan, A. (1980). The Lagrange Multiplier Test and Its Applications to Model Specification Tests in Econometrics. Review of Economic Studies(47), 239-253.
  • Büyükşalvarcı, A. (2010) “The Analysis of Relationships between Financial Ratios and Stock Returns: A Research on ISE Manufacturing Sector”, Journal of Accounting and Finance, 48: 130-141.
  • Chowdhury, Anup & Chowdhury, Suman Paul (2010), “Impact of Capital Structure on Firm’s Value: Evidence from Bangladesh”, Business and Economic Horizons, 3(3), 111-122.
  • Ercan, M. K. & Üreten, A. (2000). Firm Value Determination and Management, Gazi Kitabevi, Ankara, ss.123,128.
  • Gümüş, T.U., Şakar, Z., Akkın,G. & Şahin, M., (2017) The Ratios Used in Financial Analysis and Firm Value Relations : An Analysis on Cement Company In BIST Index, Journal of Black Sea Social Sciences. Cilt 9, Sayı 16.
  • Gill, A. & Mathur, N. (2011) “Board Size, CEO Duality, and the Value of Canadian Manufacturing Firms”, Journal of Applied Finance and Banking, 1(3): 1-13.
  • Gujaratı, Damodar N. (2001), Basic Econometrics, Trans., Ümit Şenesen ve Göktürk Şenesen, 2. Baskı, Literatür Yayıncılık, İstanbul.
  • Güriş, S., Çağlayan, E., & Güriş, B. (2011). Basic Econometrics with Eviews, İstanbul: Der Yayınları.
  • Hausman, J. A. (1978) “Specification Test in Econometrics”, Econometrica, 46(6): 1251-1271.
  • Korkmaz, Ö. & Dilmaç, M. (2018) “Factors Affectıng Fırm Stock Market Value: An Applıcatıon On Bank And Insurance Fırms” Journal of Management and Economic Research, Cilt/Volume: 16 Sayı/Issue: 2 Haziran/June 2018 ss./pp. 179-201.
  • Küçükkaplan, İ. (2013), “The Endogenous Variables Explaining the Market Value of Manufacturing Firms in the ISE: A Sectoral Level Panel Data Analysis for Sectors ”, Journal of Eskişehir Osmangazi University, 8(2), 161-182.
  • Lin, Feng-Li & Chang, Tsangyao (2011), “Does Debt Affect Firm Value in Taiwan? A Panel Threshold Regression Analysis”, Applied Economics, (46), 117-128.
  • Meder,H.(2000), Firm Value and Application on Firm in Denizli, Adnan Menderes University Institute of Social Sciences. Unpublished Phd Thesis.
  • Savsar, A. (2012), The Relationship Between Financial Ratios and Firm Value and An Application in the Istanbul Stock Exchange, Unpublished Master Thesis, Gaziosmanpaşa University Institute of Social Sciences.
  • Pesaran, M. (2007). A Simple Panel Unit Root test in the Presence of Cross Section Depence.Journal of Applied Econometrics, 22(2), 265-312.
  • Schularick, M. & Steger, T. M. 2010. Financial İntegration, İnvestment, And Economic Growth: Evidence From Two Eras Of Financial Globalization. The Review Of Economics And Statistics, 92(4): 756-768.
  • Tarı, R, Econometrics, Umuttepe Yay., Kocaeli, 2011.
  • Tatoğlu, Y. (2013). Panel Data Econometrics Applied to Stata. İstanbul: Beta Yayıncılık.
  • Usta,Ö. (2012), Business Finance and Financial Management, Detay Yayıncılık, Ankara
Year 2020, Volume: 13 Issue: 2, 13 - 24, 31.12.2020

Abstract

References

  • Akgüç, Ö. (2011) “Financial Management”, İstanbul: Avcıol Publishing.
  • Akyüz, K.C. ve Yıldırım, İ. (2019) “Relationship Between Financial Ratios and Firm Value; An Application in Paper and Paper Products Industry” Düzce University Journal of Science and Technology, 7 (2019) 1778-1792.
  • Aras, G., Kutlu Furtuna, Ö. & Mutlu Yıldırım, F. (2017) “The Impact of Investment and Financing Decisions on Market Value in Turkey” Journal of Business Research Turk, 9/4, 120-138
  • Arkan, F. (2010), Financial Structure and Firm Value Relationship: A Research on Firms Registered in ISE, Unpublished Master Thesis, Selcuk University Institute of Social Sciences.
  • Ayrıçay, Y. & Türk, V. E. (2014) “The Relationship Between Financial Ratios And Firm Value: An Enforcement In Borsa Istanbul”, Journal of Accounting and Finance, 64: 53-70.
  • Baltagi, B. (2005). Econometric Analysis of Panel Data. New Yoek: John Wiley & Sons INC.
  • Betz, F. 2011. Managing Technological İnnovation: Competitive Advantage From Change. Wiley-Inter science.
  • Biçen, Ö.F. & Sezgin, H. (2017) “The Effects Of Fınancıal Ratıos On Fırm Value: A Panel Data Analysıs For Borsa İstanbul It Sector” Journal of Management and Economic Research.
  • Birgili, E. & Düzer, M. (2010) “The Relationship Between The Rates Which Are Used In Financial Analysis And Firm Value An Application in Istanbul Stock Exchange”, Journal of Accounting and Finance, 46: 74- 83.
  • Breusch, T., & Pagan, A. (1980). The Lagrange Multiplier Test and Its Applications to Model Specification Tests in Econometrics. Review of Economic Studies(47), 239-253.
  • Büyükşalvarcı, A. (2010) “The Analysis of Relationships between Financial Ratios and Stock Returns: A Research on ISE Manufacturing Sector”, Journal of Accounting and Finance, 48: 130-141.
  • Chowdhury, Anup & Chowdhury, Suman Paul (2010), “Impact of Capital Structure on Firm’s Value: Evidence from Bangladesh”, Business and Economic Horizons, 3(3), 111-122.
  • Ercan, M. K. & Üreten, A. (2000). Firm Value Determination and Management, Gazi Kitabevi, Ankara, ss.123,128.
  • Gümüş, T.U., Şakar, Z., Akkın,G. & Şahin, M., (2017) The Ratios Used in Financial Analysis and Firm Value Relations : An Analysis on Cement Company In BIST Index, Journal of Black Sea Social Sciences. Cilt 9, Sayı 16.
  • Gill, A. & Mathur, N. (2011) “Board Size, CEO Duality, and the Value of Canadian Manufacturing Firms”, Journal of Applied Finance and Banking, 1(3): 1-13.
  • Gujaratı, Damodar N. (2001), Basic Econometrics, Trans., Ümit Şenesen ve Göktürk Şenesen, 2. Baskı, Literatür Yayıncılık, İstanbul.
  • Güriş, S., Çağlayan, E., & Güriş, B. (2011). Basic Econometrics with Eviews, İstanbul: Der Yayınları.
  • Hausman, J. A. (1978) “Specification Test in Econometrics”, Econometrica, 46(6): 1251-1271.
  • Korkmaz, Ö. & Dilmaç, M. (2018) “Factors Affectıng Fırm Stock Market Value: An Applıcatıon On Bank And Insurance Fırms” Journal of Management and Economic Research, Cilt/Volume: 16 Sayı/Issue: 2 Haziran/June 2018 ss./pp. 179-201.
  • Küçükkaplan, İ. (2013), “The Endogenous Variables Explaining the Market Value of Manufacturing Firms in the ISE: A Sectoral Level Panel Data Analysis for Sectors ”, Journal of Eskişehir Osmangazi University, 8(2), 161-182.
  • Lin, Feng-Li & Chang, Tsangyao (2011), “Does Debt Affect Firm Value in Taiwan? A Panel Threshold Regression Analysis”, Applied Economics, (46), 117-128.
  • Meder,H.(2000), Firm Value and Application on Firm in Denizli, Adnan Menderes University Institute of Social Sciences. Unpublished Phd Thesis.
  • Savsar, A. (2012), The Relationship Between Financial Ratios and Firm Value and An Application in the Istanbul Stock Exchange, Unpublished Master Thesis, Gaziosmanpaşa University Institute of Social Sciences.
  • Pesaran, M. (2007). A Simple Panel Unit Root test in the Presence of Cross Section Depence.Journal of Applied Econometrics, 22(2), 265-312.
  • Schularick, M. & Steger, T. M. 2010. Financial İntegration, İnvestment, And Economic Growth: Evidence From Two Eras Of Financial Globalization. The Review Of Economics And Statistics, 92(4): 756-768.
  • Tarı, R, Econometrics, Umuttepe Yay., Kocaeli, 2011.
  • Tatoğlu, Y. (2013). Panel Data Econometrics Applied to Stata. İstanbul: Beta Yayıncılık.
  • Usta,Ö. (2012), Business Finance and Financial Management, Detay Yayıncılık, Ankara
There are 28 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Emine Karaçayır 0000-0003-0512-9084

Aslı Afşar

Publication Date December 31, 2020
Published in Issue Year 2020 Volume: 13 Issue: 2

Cite

APA Karaçayır, E., & Afşar, A. (2020). EFFECT OF INVESTMENT AND FİNANCİNG DECİSİONS ON FİRM VALUE; EXAMPLE OF BIST INDUSTRİAL INDEX. Uşak Üniversitesi Sosyal Bilimler Dergisi, 13(2), 13-24.

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