PurposeThe purpose of the paper is to obtain measure of the intellectual capital (IC) performance of quoted banks on the Istanbul Stock Exchange Market (ISE) in Turkey for the period 1995‐2004 and test the effect of the intellectual capital performance on profitability.Design/methodology/approachData required for calculating intellectual capital efficiencies were obtained from the ISE for the period 1995‐2004. The authors measured the intellectual capital performance of quoted banks in ISE using the efficiency coefficient, called Value Added Intellectual Coefficiency (VAICTM), and tested the effect of this intellectual capital performance on profitability using Data Envelopment Analysis (DEA). In addition, three different portfolios were constructed based on three different inputs to observe the effect of the intellectual capital on investors' behavior.FindingsThe effect of intellectual capital on profitability on the banking sector on the ISE was calculated as 61.3 percent on average and Portfolio‐1, which uses the intellectual capital measure as an input, yields the highest returns among the three portfolios constructed.Research limitations/implicationsThe study was applied only to quoted banks on the ISE for the period 1995‐2004.Practical implicationsThe findings allow the banks to benchmark themselves based on the level of IC efficiency ranking, which is important for the banking sector to develop a strategic plan for their future performance. It may also be deduced that intellectual capital is an important factor for investors.Originality/valueThis paper can be considered as one of the most comprehensive studies on testing the effect of intellectual capital performance on profitability in the banking sector using both VAIC and DEA.
Accounting based risk and return relationship is a relatively incomplete issue, which has mostly been studied under a separate framework from financial markets based risk and return. Researchers find different results for different classifications of companies/industries/time frames. This paper reports the cross-section and panel correlations between accounting risk and return for various industrial company size categories in Turkey. The goal is to show the direction and magnitude of the relationship. When standard deviation is used as a risk measure, significant correlations are typically positive for small & medium sized companies and large companies. The positive relationship is very strong when the performance measure is ROE. All significant correlations become negative for very large sized companies. For each size category, no difference is observed between low-performers and high-performers in terms of significant coefficient signs. However, when we look at the magnitude of coefficients, there are some substantial differences between size categories, and between performance categories. When the risk measure is total debt to total assets ratio, our results show significant negative association between return and risk for all company size categories.
Turkish immigrants have always been an important dynamic for the social and business life in Germany since October 1961, "Agreement for Sending the Turkish Workers to Germany". They have then started to become important players as entrepreneurs in the economy after 1990s. This study aims to analyze performance of Turkish and German companies in production and service industries operating in Germany by using financial analysis methodology, and it aims to compare the results. Using 2007 financial data, the empirical results show that Turkish firms in both industries take more liquidity risk than their German counterparts while they are using less leverage in order to finance their investments. Moreover, Turkish companies have less profitability than German companies with the effect of high cost of debt. Especially in service industry, Turkish firms have low level of return for a unit of risk and low level of output for a unit of input.
This study investigates the presence of return and volatility spillover across EAGLEs stock markets, namely China, India, Indonesia, Russia, Brazil, Turkey and Mexico. A multivariate GARCH DCC and BEKK frameworks are employed by classifying the total sample (i.e. from January 2002 to February 2017) into three sub-periods according to the 2008 Global financial crisis. The result shows a significant and positive spillover effect among stock markets in the pre-crisis and post-crisis periods. The transmission of spillover from external markets intensely influenced by US stock market. Furthermore, strong inter-connection and channel of spread observed among EAGLEs stock market during the post-crisis period.
In 2013, the CMA at the İstanbul Stock Exchange increased the weight assigned to the Board of Directors component of its Corporate Governance Index to 35% from the previous 25%. Interpreting this as a recognition of the increasing vital role of the board, this study seeks to enhance the work of Abdıoğlu and Kılıç (2015) by putting more focus on the role of women in the boards and the effect of the busy chairman as well as the presence of outside directors on the effectivity of the Board. (The general business structure is associated with family owned groups and holdings which results into a network of intertwined board membership and cases of multiple directorship where, one board chairman can hold the same position or any directorship in as many as ten firmshence the busy chairman). I employ a different method of evaluating performance (EVA) together with the accounting measures of ROE and ROA (as opposed to the overused Tobin’s Q), which I regress against the Board Index to be created. The focus is on firms on the BIST 100 index (excluding financial) between 2009 and 2013. The results reveal that the BINDEX has a significant and positive relationship with firm performance as measured by EVA. A second model reveals no relationship between the BINDEX and firm ROA, similar to the results of Kiliç and Abdioğlu (2015). ROA however has a positive relationship with the proportion of female directors in the board, as earlier reported by LückerathRovers (2013). Another model using ROE as the proxy for performance registers a significant negative relationship with the index. The contradiction obtained in the results from these three models underscore the importance choosing the right methods when estimating the performance of a firm.
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