An Alternative Sensitivity Analysis for the Evaluation of MCDA Applications: The Significance of Brand Value in the Comparative Financial Performance Analysis of BIST High-End Companies

Orhan Emre Elma, Željko Stević () and Mahmut Baydaş ()
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Orhan Emre Elma: Faculty of Applied Sciences, Necmettin Erbakan University, Konya 42005, Türkiye
Željko Stević: School of Industrial Management Engineering, Korea University, 145 Anam-Ro, Seongbuk-Gu, Seoul 02841, Republic of Korea
Mahmut Baydaş: Faculty of Applied Sciences, Necmettin Erbakan University, Konya 42005, Türkiye

Mathematics, 2024, vol. 12, issue 4, 1-24

Abstract: Multi-criteria decision analysis (MCDA) applications consist of techniques that enable the decision maker to make clearer decisions in scenarios where there is more than one alternative and criterion. The general approach for sensitivity analysis in MCDA applications implies sensitivity to the weight coefficient. In this study, as an alternative approach, we reinterpret sensitivity by using the statistical relationship between the final ranking produced by an MCDA method and a constant external factor. Thus, we both verify through an anchor and reveal to what extent the change in the weight coefficient changes the external relations of MCDA. The motivation for this study is to propose an alternative sensitivity methodology. On the other hand, brand value is a parameter that contains critical information about the future of the company, which has not integrated into financial performance studies made with MCDAs before. To that end, the financial performance of 31 companies with the highest brand value in Turkey and trading on Borsa Istanbul between 2013 and 2022 was analyzed with seven different MCDA applications via integrating brand value into the criteria for the first time. The study’s findings revealed that the proposed innovative sensitivity tests produced similarly robust results as traditional tests. In addition, brand value has been proved to be an advantageous criterion to be implemented into MCDAs for financial performance problems through the sensitivity analysis made.

Keywords: sensitivity; MCDA; capital markets; stock returns; brand value (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2024
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