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The Effects Of Financial Risk Management On Firm’S Value: An Empirical Evidence From Borsa Istanbul Stock Exchange

Author

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  • ŞENOL, Zekai

    (Cumhuriyet University, Faculty of Economics and Administrative Sciences, Banking and Finance)

  • KARACA, Süleyman Serdar

    (Gaziosmanpaşa University, Faculty of Economics and Administrative Sciences, Department of Business)

  • ERDOĞAN, Seda

    (Gaziosmanpaşa University)

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.

Suggested Citation

  • ŞENOL, Zekai & KARACA, Süleyman Serdar & ERDOĞAN, Seda, 2017. "The Effects Of Financial Risk Management On Firm’S Value: An Empirical Evidence From Borsa Istanbul Stock Exchange," Studii Financiare (Financial Studies), Centre of Financial and Monetary Research "Victor Slavescu", vol. 21(4), pages 27-45.
    • Handle: RePEc:vls:finstu:v:21:y:2017:i:4:p:27-45
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    References listed on IDEAS

    as
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    Cited by:

    1. Zaher Abdel Fattah Al-Slehat, 2020. "Impact of Financial Leverage, Size and Assets Structure on Firm Value: Evidence from Industrial Sector, Jordan," International Business Research, Canadian Center of Science and Education, vol. 13(1), pages 109-120, January.

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    More about this item

    Keywords

    Financial Risk Management; Derivatives; Panel Data Analysis;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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