THE EFFECTS OF FINANCIAL RISK MANAGEMENT ON FIRM’S VALUE: AN EMPIRICAL EVIDENCE FROM BORSA ISTANBUL STOCK EXCHANGE

Zekai Şenol, Süleyman Serdar Karaca and Seda Erdoğan
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Zekai Şenol: Cumhuriyet University, Faculty of Economics and Administrative Sciences, Banking and Finance
Süleyman Serdar Karaca: Gaziosmanpaşa University, Faculty of Economics and Administrative Sciences, Department of Business
Seda Erdoğan: Gaziosmanpaşa University

Studii Financiare (Financial Studies), 2017, vol. 21, issue 4, 27-45

Abstract: World trade volume shows rising trend and financial markets have been deepening. Firms that operate in the framework of economic and financial structure are affected by fluctuations in different factors such as interest rate, exchange rate and commodity prices. In this context, the use of derivatives allow companies to manage controllable risk and are preferred within the scope of financial risk management for the purpose of hedging. The prime aim of this research is to detect both the effect of derivatives in the financial risk management proves and financial risk management determinants by employing panel data analysis technique and panel logistic regression model. In order to accomplish this purpose, 248 observations of 31 companies listed in the BIST from 2008 to 2015 are analysed. The main outcome of research demonstrates that the financial risk management has no effect on the firm value. In addition, according to the research, determinants of Financial Risk Management detected are as fallows; the variables of financial leverage, exchange rate risk, firm size and geographical diversity.

Keywords: Financial Risk Management; Derivatives; Panel Data Analysis (search for similar items in EconPapers)
JEL-codes: C10 G32 L25 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (1)

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