The impact of corporate finance decisions on market value in emerging markets

Guler Aras and Filiz Mutlu Yildirim

International Journal of Productivity and Performance Management, 2018, vol. 67, issue 9, 1959-1976

Abstract: Purpose - The purpose of this paper is to analyze the conformity of the impact of corporate finance decisions on market value with the basic theoretical approaches in the two emerging economies, which show great similarities in terms of the economic structures, and to examine the results obtained by determining how these decisions affect market value comparatively. Design/methodology/approach - In this study, the effect of corporate finance decisions on market value is tested empirically with panel data analysis method by using data of 274 real sector firms traded in BIST and 249 firms in BOVESPA industry index, between 2010 and 2014. Findings - The analysis results show that the increase in the borrowing level of firms operating in both countries reduces the market value; the increase in the level of profitability in the firms has a positive effect on the market value. In addition, it is possible to say that the effect is different in terms of investment decisions for Turkish and Brazilian firms. Research limitations/implications - The limitations of the study are that the non-financial sectors between 2010 and 2014 in Turkey and Brazil including the company data, and the companies with missing years are removed from the data set. The findings show that more effective and balanced management of the variables by the financial manager affects these rates and have an impact on increasing the market value. Originality/value - In this study, a fundamental subject in finance is addressed by analytical methodology and comparative tests for countries are conducted.

Keywords: Turkey; Brazil; Market value; Panel data analysis; Corporate finance decisions (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:ijppmp:ijppm-11-2017-0285

DOI: 10.1108/IJPPM-11-2017-0285

Access Statistics for this article

International Journal of Productivity and Performance Management is currently edited by Dr Luisa Huatuco and Dr Nicky Shaw

More articles in International Journal of Productivity and Performance Management from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().